Good morning, and welcome to S&P Global's Third Quarter 2016 Earnings Conference Call. I'd like to inform you that this call is being recorded for broadcast. All participants are in a listen-only mode. We will open the conference to questions-and-answers after the presentation and instructions will follow at that time. To access the webcast and slides, go to investor.spglobal.com that is investor.spglobal.com and click on the link for the quarterly earnings webcast. [Operator Instructions]. I would now like to introduce Mr. Chip Merritt, Vice President of Investor Relations for S&P Global. Sir, you may begin.

Thank you and good morning. We apologize for the technical difficulties, we'll try this again. Thanks for joining us for S&P Global Earnings Call. Presenting on this morning's call are Doug Peterson, President and CEO; and Rob MacKay, Interim Chief Financial Officer. This morning, we issued a news release for our third quarter 2016 results. If you need a copy of the release and financial schedules, they can be downloaded at investor.spglobal.com. In today's earnings release and during the conference call, we'll provide an adjusted financial information. This information is provided to enable investors to make meaningful comparison of the corporation's operating performance between periods and to view the corporation's business from the same perspective as managements. The earnings release contains Exhibits that reconcile the difference between the non-GAAP measures and the comparable financial measures calculated in accordance with U.S. GAAP. Before we begin, I need to provide certain cautionary remarks about forward-looking statements. Except for historical information, the matters discussed in the teleconference may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections, estimates, and description of future events. Any such statements are based on current expectations and current economic conditions and are subject to risk and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. In this regard, we direct listeners to the cautionary statements contained in our Form 10-Ks, 10-Qs, and other periodic reports filed with the U.S. Securities and Exchange Commission. I would also like to call your attention to European regulation. Any investor who has or expects to obtain ownership of 5% or more of S&P Global should give me a call to better understand the impact of this legislation on the investor and potentially the company. We're aware that we do have some media representatives with us on the call. However, this call is intended for investors. And we would ask that questions from the media be directed to Jason Feuchtwanger at (212) 438-1247. At this time, I would like to turn the call over to Doug Peterson. Doug?

Good morning. Thank you, Chip. Welcome everyone to the call. This morning Rob Mackay, our Interim CFO, has joined us to cover the financial portion of our third quarter results and you will hear from him shortly. But let me begin with the highlights. We completed several business divestitures with the sales of J.D. Power, our two pricing businesses SPSE and CMA, and the equity research business. This leaves us with a more focused interrelated portfolio of market-leading businesses. Two tuck-in acquisitions were added during the quarter, PIRA Energy Group within Platts and Trucost within S&P Dow Jones indices. Several key management additions were announced. We completed the three-year $140 million cost reduction initiative that was announced during our Investor Day in 2014. We demonstrated continued revenue growth and productivity progress which led to an adjusted profit margin improvement of 320 basis points, with every segment delivering organic revenue growth. As a result of our share repurchases, we reduced average diluted shares outstanding by 3% year-over-year. Our bottom-line result was excellent with a 17% increase in adjusted diluted EPS over the third quarter last year. We delivered year-to-date free cash flow of over $1 billion and we increased our 2016 adjusted diluted EPS guidance to a range of $5.15 to $5.25 which Rob will cover shortly. Before we turn to the results, I want to note three new appointees to our management team. Steve Kemps joined us from our Quanta Services as EVP of General Counsel. Martin Fraenkel has been promoted to President, SVP Global Platts. Martin previously led the Global Editorial Team at Platts. And Ewout Steenbergen will join us from Voya Financial as EVP and Chief Financial Officer effective November 14. I'm pleased we avoided any disruptions to our businesses as we put in place an excellent leadership team. Now let's take a closer look at the third quarter results. Reported revenue grew 9% and organic revenue on a constant currency basis increased 8%. In the third quarter ForEx reduced revenue by $5 million yet contributed approximately $8 million to adjusted operating profit and approximately 60 basis points in the adjusted operating profit margin. Most of this benefit was realized in the Platts segment which benefited from a weaker British pound. The company delivered a 320 basis point improvement in adjusted operating profit margin. Together, revenue growth, margin improvement, and share repurchases led to a 17% increase in adjusted diluted EPS of $1.43 per share. In the third quarter, every division recorded organic top-line growth. Profit growth however was most pronounced at ratings and market intelligence with adjusted operating profit margin gains of 330 and 480 basis points respectively. Let me turn to the businesses and I'll start with S&P Global ratings. Despite initial uncertainty from the Brexit vote, third quarter issuance was strong, particularly in non-financial Global Corporate and U.S. public finance markets. This resulted in a 9% increase in revenue with a 1% unfavorable impact from ForEx. Adjusted operating profit increased 17% due to strong revenue growth and cost containment particularly with reduced legal and outside services spending. Adjusted operating margin increased 330 basis points to 51.3%. ForEx had a negligible impact on adjusted operating profit. Non-transaction revenue was unchanged with growth in surveillance fees, offset by lower rating evaluation services fees. Transaction revenue increased 23% as a result of improved contract term, growth in debt issuance, and a 21% increase in bank loan ratings revenue. I also want to note that as we work to re-enter the U.S. conduit/fusion CMBS market there are 13 transactions in the quarter and we re-rated two of them. If we look more closely at the largest markets, third quarter issuance in U.S. was up 7% with investment grade decreasing 3%, high-yield soaring 49%, public finance up 16% and structured finance increasing 11% due to 44% increase in ABS transactions driven especially by credit card ABS. In Europe, issuance increased 14%, with investment grade climbing 42% driven by large M&A transactions, high-yield rising 37%, and structured finance decreasing 46% primarily due to 59% decline in covered bonds. In Asia, issuance more than doubled. However excluding domestic China issuance which we do not rate, Asia issuance increased 64%. Investment grade surged a 166%. However excluding domestic China it increased 67%. Japan was country with the largest increase due to the Bank of Japan's negative interest-rate policy. Finally, structured finance increased 2%. Two weeks ago, S&P Global ratings released its latest global issuance forecast. In the three months since the Brexit vote, debt markets have reacted very positively with unexpected levels of new issuance, especially in the non-financial corporate financial sectors and international public finance sectors. We now expect global issuance to increase 24% in 2016. This compares to the July forecast issued on the heels of the Brexit vote which anticipated a decline of approximately 4%. If we remove sovereign issuance from the forecast however, we anticipate issuance 2016 to increase approximately 10%. Looking ahead to 2017, we expect an overall issuance increase -- we expect an overall increase in global issuance of 5% driven by the ECB extending its quantitative easing policies longer than currently anticipated and further growth out of China. Excluding sovereign issuance, we anticipate issuance 2017 to increase 3% to 6%. Now let me turn to S&P Global Market Intelligence. In the third quarter, revenue increased 21% primarily due to the addition of SNL. Excluding SNL organic revenue growth was 7%. Adjusted operating profit increased 43% and the adjusted operating margin advanced 480 basis points to 31.4%. This improvement was due to progress on SNL integration synergies, operating leverage from strong organic revenue growth, and continued efficiency gains. ForEx had a negligible impact on revenue and adjusted operating profit in the quarter. As we have stated before in 2016, successful integration of SNL and delivery of synergies is a top priority for the company. We have made tremendous progress as evidenced in the margin improvement and remain committed to achieving our integration synergy targets and deliver on our expected return on investment in SNL. Let me add a bit more color on third quarter revenue growth and market intelligence. In financial data and analytics, S&P Capital IQ desktop and Enterprise Solutions revenue increased 6% with high-single-digit growth in S&P Capital IQ desktop. In addition, on a comparable basis, which includes revenue prior to our acquisition, SNL revenue increased 12% over the third quarter 2015. SNL and S&P Capital IQ desktop experienced year-over-year user percentage growth in the low-teens and high-single-digits respectively. Risk services revenue increased 10% led by double-digit Ratings Xpress growth. In the smallest category, research and advisory, revenue decreased 8% due to declines in equity research. With the sale of equity research, the only remaining asset in this category is investment advisory. Therefore, in the future, we will report investment advisory as part of financial data and analytics. Now let's turn to S&P Dow Jones indices. Revenue increased 6%, adjusted operating profit increased 1%, and adjusted operating margin declined 320 basis points to 66.2%. This is a sizable decline into third quarter of 2015 benefited from a sharp increase in exchange traded derivative volumes that did not repeat this quarter. I also want to point out that the adjusted margin this quarter is comparable to the 66% figure we reported last quarter. During the third quarter, revenue increased primarily due to mutual fund and ETF licensees and steady data license growth. Operating costs increased to support revenue growth and business initiatives as well as increased costs for purchase data. One notable example is connectivity expenses as we recently started up a third data center to provide additional backup capabilities. Often on our earnings call, I say new products that we have launched. Last quarter, I highlighted the launch of the JPX/S&P CAPEX & Human Capital Index in Japan. The new ETF that was launched based on this index has turned out to be one of the fastest growing new ETF this year. It already has over $700 million in AUM. Asset like linked fee revenue increased 10% during the quarter. The exchange traded products industry recorded massive inflows of $126 billion in the third quarter almost tripled the inflows in the second quarter. Of the $126 billion of industry inflows, $58 billion went into the U.S. equity products with S&P Dow Jones indices capturing about 60% of those inflows. Average ETF AUM associated with our indices increased 15% year-over-year with inflows of 10% and the remainder from market appreciation. The quarter ending ETF AUM associated with our indices reached a new record of $914 billion. Transaction revenue from exchange traded derivatives decreased primarily due to a 14% decrease in average daily volume of products based on our indices. The E-mini S&P 500 Futures, CBOE Volatility Index options and futures VIX, and CME Equity complex contracts all decreased 10% to 25% compared to the volatile third quarter of 2015. Subscription revenue, which consists primarily of data subscriptions and custom indices increased due to growth in data subscription revenue and the timing of subscription revenue. During the quarter, the company launched 161 new indices and our partners launched 11 new ETF based on our indices. Now on to the S&P Global Platt segment, which included J.D. Power results for July and August. Because this quarter has one less month of J.D. Power revenue than the third quarter of 2015, segment revenue declined 8%. Segment organic revenue though increased 4%, adjusted operating profit increased 4% reflecting one less month of J.D. Power, and adjusted operating margin increased 170 basis points to 40.9%. Organic revenue increased 4% due to growth in subscriptions, partially offset by decline in global trading services. The core subscription business delivered mid-single-digit revenue growth led by the petroleum sector. The global trading services double-digit revenue decrease is primarily due to the timing of license fees. Gas and power revenue was flat with modest gains in subscriptions offset by lower GTS service revenue. Metals, agriculture, and petrochemicals revenue declined low-single-digits, primarily due to lower revenue from SGX's listed TSI iron ore contract. We continue to expect modest growth in the remainder of 2016 as many customers continue to face pressure from low oil prices. On the business development front, we are building a world-class capability in energy, supply, and demand information. The acquisition of PIRA Energy Group, and the added capabilities of Commodity Flow and RigData, which we acquired earlier this year. PIRA is a leader in the worldwide energy market analysis and a great complement to our existing benchmarks. PIRA offers research and analysis in oil, gas, power, natural gas liquids, biofuel, coal, environmental, and agricultural markets. They also provide data tools to help customers analyze prices, supply, demand, trade flows, product balances and refining activities. And I'm pleased that Executive Chairman and Founder of PIRA, Dr. Gary Ross has joined our team and is already generating new product ideas. In addition, Platts worked with CME to launch a new futures contract, Alumina FOB Australia futures will be a 100 metric ton contract will be financially settled each month against a daily price index published for Alumina FOB Australia by S&P Global Platt. Alumina is aluminum oxide, a white granular material a little finer than table salt is transformed into aluminum metal in the smelting process. This new futures contract is an addition to the three existing CME aluminum futures contracts based on Platt benchmarks. And finally, Brazil CETIP Latin America's largest depository of private fixed income securities in Brazil's largest private-asset clearinghouse is going to make Platt's benchmark price assessments available with settlement mechanisms for the development of domestic derivative contracts. Historically, Brazil's only hedging tools tend to be similar, but not necessarily matching commodity indices or they were international rather than domestic contracts. Investors are increasingly seeking new insights into environmental, social, and governance factors, and both our index and ratings businesses are taking action to address these need. First our S&P Dow Jones indices acquired Trucost. Trucost has become a leading brand in ESG information sector. They provide the gold standard carbon and natural capital investment metrics that financial institutions need to assess the risks and opportunities presented by climate change and capitalize on the transition to a low-carbon resource efficient economy. The complementary nature of our two businesses, allow us to combine Trucost, industry leading environmental impact data, with our world-class benchmarking capabilities develop new ESG solutions. Second, Ratings is developing a Green Bond Evaluation tool to provide an analysis and estimate of the environmental impact of projects financed by bond proceeds. Our proposed approach would address mitigation such as reducing negative environmental impact and adaptation to look at resiliency to the impact of climate change. The output of the Green Bond Evaluation would include scores from the categories listed here amalgamated into an overall financial green -- final Green Bond Evaluation. I'm encouraged by the innovative thinking underway in the company to help tackle increased ESG needs of investors. Before I conclude, I need to point out a reporting change. Beginning in the fourth quarter we will report our results under three segments: rating, indices, and marketing commodities intelligence. We are doing this to be consistent with how we manage our businesses. In summary, we completed sales of J.D. Power, two pricing businesses, and equity research. We had consistent results with all segments delivering organic revenue growth. Bond issuance is robust in the third quarter despite the Brexit vote. Our focus on revenue growth and productivity performance led to continued margin improvement. Integration of SNL is progressing well and remains a top priority in 2016. And our adjusted diluted EPS guidance is increased to a range of $5.15 to $5.25 and includes dilution from the sale of J.D. Power, the pricing businesses, and equity research. With that, let me turn the call over to Rob.

Thank you, Doug, and good morning to everybody on the call. This morning, I will recap key financial results, discuss the impact from adjustments to earnings, then I'll update you on the balance sheet, free cash flow, and return of capital. Next I will discuss the completion of our $140 million productivity program. The financial impact of our recent divestitures and update our 2016 guidance. Before wrapping up, I will explain the new segment reporting that will be effective beginning in the fourth quarter and the data we will provide. Let's start with the consolidated third quarter income statement. There are just a couple of items, I want to highlight. As you've just heard from Doug, all of our segments delivered top-line organic growth. Collectively that led to an increase in reported revenue of 9% with organic growth on a constant currency basis of 8%. The difference is largely due to the SNL acquisition. Foreign exchange rates reduced revenue by $5 million and had a favorable impact of $8 million on operating profit. Adjusted operating margin increased 320 basis points. Approximately 60 basis points was due to ForEx, the balance was primarily due to outstanding top-line growth and margin improvement at S&P Global Ratings and S&P Global Market Intelligence. The adjusted tax rate in the third quarter was 31.3%, an increase of 220 basis points over the third quarter of 2015 due to one-time benefits recorded in the prior period. Share repurchases over the past year have resulted in a 3% decline in average diluted shares outstanding. Taken together, top-line growth, margin improvement, and share count reduction combined to deliver a 17% increase in adjusted diluted earnings per share. Now let me turn to adjustments to earnings to help you better assess the underlying performance of the business. Pre-tax adjustments to earnings totaled to a gain of $732 million in the quarter. The largest item is a gain on the sale of J.D. Power. The next item is a net gain from insurance proceed recoveries. And the last item includes net acquisition and disposition related costs, primarily related to the sale of our SPSE and CMA pricing businesses to ICE and J.D. Power to the XIO Group. And as we discussed earlier this year, our adjusted results now exclude deal-related amortization, which totaled $23 million during the quarter. All adjustments are detailed on Exhibit 5 of today's earnings release. Now let's turn to the balance sheet. At the end of the quarter, we had $2.4 billion of cash and cash equivalents of which approximately $1.6 billion was held outside of the United States. We also had $3.6 billion of long-term debt and $400 million of short-term debt. The short-term debt is the value of the 2017 notes that were redeemed in October. One other item that I want to point out is that the cash proceeds from the sale of J.D. Power were reported in the quarter. However, the tax on the gain will not be paid until later in the fourth quarter. Free cash flow during the first nine months was approximately $1 billion. However to get a better sense of our underlying cash generation from operations, it is important to exclude the after-tax impact of legal and regulatory settlements and related insurance recoveries. On that basis, free cash flow from the first nine months was approximately $1.1 billion. Now I'll review our return of capital. During the quarter the company initiated a $750 million accelerated share repurchase plan. This resulted in the repurchase of 5.3 million shares during the quarter. However, the final share count reduction will not be determined until the ASR is completed. In addition, the company paid a dividend of $95 million during the quarter. Year-to-date the company has returned $1.4 billion to shareholders through share repurchases and dividends. In March of 2014, we initiated a productivity target of greater than $100 million in cost reduction initiatives during 2014 to 2016. We subsequently increased the target to $140 million. Today we are pleased to announce the successful completion of this program. We delivered slightly more than $140 million in savings. You look at the chart on the right; you can see that our adjusted operating margin has increased by 900 basis points since 2013. The successful achievement of this $140 million productivity target was a key contributor to this improvement. While we are pleased with our recent divestitures; we want to make sure all of you understand the loss of revenue and profitability associated with these transactions. J.D. Power, SPSE and CMA pricing businesses, and equity research combines to generate $310 million of revenue, $108 million of pro forma adjusted EBITDA, and approximately $0.25 of pro forma adjusted diluted EPS to our 2016 results before they were sold. This equates to approximately $100 million of revenue and $0.08 of adjusted diluted EPS that will be forgone each quarter. The recently announced ASR should help offset some of this dilution. We estimate that the ASR will increase diluted adjusted earnings per share by about $0.10 over the next year. We hope these figures will help you with your modeling of our future results. Based upon our strong results year-to-date and the expectation that debt issuance remained strong for the remainder of the year, we are increasing our adjusted EPS guidance to a range of $5.15 to $5.25. We've also made changes to other components of guidance as follows: adjusted and allocate expense is reduced to $135 million due primarily to reduced professional fees. The adjusted operating margin increase over 2015 is now expected to be approximately 200 basis points. This is largely due to the excellent performance in ratings and market Intelligence. The adjusted tax rate is increased to approximately 31.5% primarily due to the timing and size of past years tax settlements. Free cash flow, excluding the after-tax, legal and regulatory settlements and insurance recoveries is increased to $1.4 billion to the strong financial results. Overall, this guidance reflects our expectation that 2016 will be another strong year for the company. Final item I want to discuss is the upcoming change to our reporting segments. Beginning in the fourth quarter, S&P Global Market Intelligence and S&P Global Platts will be included in a new segment called Market and Commodities Intelligence. Both fourth quarter results and full-year 2016 results of both businesses will be reported in this new segment. To facilitate analysis in the next few weeks, we will provide a pro forma schedule with results of this new segment for all quarters of 2015 and 2016 as if it had existed this way. This should help investors model 2017 appropriately. With that, let me turn the call back over to Chip for your questions.

Thanks, Rob. Just a couple instructions for our phone participants. [Operator Instructions]. I would kindly ask you to limit yourself to two questions that's two questions per call, in order to allow time for other callers during today's Q&A session. [Operator Instructions]. Operator, we'll now take our first question.

Thank you. First question comes from Ashley Michael Rao from Credit Suisse. You may now ask your question.

Good morning. First question is when you think about the integration of the consolidation of segments of Platts into Market Intelligence and you consider recent divestitures, does this change to mid 30% margin target discussed on the last call for that segment?

Yes, good morning. Thanks, Ashley. So as we were looking at the sale of J.D. Power and then how we were going to manage the company, it was clear that one of the largest opportunities for the Platts business is in the data and analytics space where we've made recent acquisitions and see a lot of opportunity for growth in that area. So by putting these businesses working together between Market Intelligence and having them both report to Mike Chinn, we feel there is opportunities for us there. We do, we will send out further information in the next couple of weeks about how these -- how this segment is going to look when we put these businesses together, but we will be targeting blended margin that's in the high 30s range.

Okay. Thanks for that. And then as you continue to shape the company's portfolio and also execute on it as an integration, can you just talk about the types of assets you find attractive on the M&A front. Should we just expect more tuck-ins in ESG or in energy and just also some thoughts on how you're thinking about using M&A as a tool to drive growth in the fixed income indexing arena today?

Well you should consider that we have a disciplined approach to our capital allocation, which starts with investing in our businesses in organic growth. We are obviously going through our year-end review and our 2017 to 2018 strategic planning process where we're evaluating ways that we can invest in the business. So investing in organic growth, which could be expansion of regional areas of new products, of technology investments, et cetera is very important for us. Following that obviously would be ways that we can accelerate growth or expand into new regions or new capabilities through M&A. Then obviously finally come our approach to dividends and share repurchase. But when it comes to your question around M&A, we would be looking at many ideas and many options coming in, tuck-ins could be attractive for us, but it's something that we would do business by business, opportunity by opportunity, look at them separately as they arise. We have seen, as you know, tuck-in acquisitions have been a way for us to grow our portfolio of products in Platts. It's given us opportunities with different areas and services in Market Intelligence. Last quarter we had purchased a very small rating agency in Thailand S&P Global Ratings area. So we would continue to look selectively at areas but they need to -- we need to ensure that they also meet our parameters for growth and return.

Thank you. The next question comes from Manav Patnaik from Barclays. You may now ask your question.

Yes, hi good morning gentlemen. So the decision to roll Platts into Market Intelligence I think that makes sense. I guess what I'm curious about is I think when we have asked this question over the last couple of months it seems like the answer was there would be more work done over the next couple of years. So I was just curious if there was any change there were you guys being conservative or is this just -- just tuck-in Platts away into that division?

Manav, can you clarify the question, what do you mean by more work being done, I'm not sure what the question is about?

Has been what changed? Because I guess my understanding was based on your response that, yes, it could be an opportunity but it would be like two to three years down the road but it sounds like as things are changing much quicker than that.

Are you talking about the opportunity for SNL and Platts to work together?

Yes, correct.

Okay, thanks. I didn't understand that. Yes, so when we look at areas that we have the largest opportunities in this company, we try to find areas where there are still large needs in the markets or areas that are unfulfilled and there is we see that the customers have made an avalanche of data, they need to make somehow they can make decisions around it. One of the areas that is a very fragmented business and there is high growth that relates to data and analytics are on the energy markets and SNL has a small energy business and Platts obviously is a very large energy business and we wanted to accelerate the integration of those two businesses. But more importantly take advantage of the expertise that we have in the Market Intelligence data machine and how they can work together with platform building out that data analytics business. So this was not something that I really felt we should wait. I felt that wasn't something we should wait for a couple of years for that we needed to move now but opportunities are going to start cropping up and we wanted to be positioned to take advantage of it as quickly as possible.

But clearly it took second place after the initial integration. So the number one priority for 2016 was getting SNL and Market Intelligence integration. And so this is, if you will kind of step two but perhaps it's done quicker than you might have thought.

Okay. All right. And then may be just asking the ratings business, your subscription growth was flat. Just some color there, I know you had some constant valuation services comps may be but curious on how we should think about modeling that piece of the business?

Yes, that was one of the areas that we had a little bit of a flat growth. It was on the subscription side. Rating evaluation service was not growing during the quarter that was -- that was one of the areas in addition to the how we're managing the business now looking at the way that we manage our contracts. So non-transaction business was flat at $343 million during the quarter. It usually grows around 3% to 4% over time but as you can see, it was offset by transaction revenue growth of $55 million from $244 million to $299 million. So there was a very robust growth in the transaction side. But we do continue to value highly this non-transaction side but the main factor was related to lower rating evaluation services fees.

Okay, got it. Thanks for the color and congrats on the solid quarter.

Thank you.

Thanks, Manav.

Thank you. The next question comes from Toni Kaplan from Morgan Stanley. Your line is now open.

I wanted to ask about the Index business. Doug, I think you mentioned increased cost of purchasing data there. Is that exchange data or data from other providers and basically, how much of an impact does this have and are you expecting this trend to continue?

It was -- it was a very minor repurchase of data, the external data, it was one of the very small factors. But the main factor which drove the drop in the margin was the lower volumes of exchange traded derivatives on the CPOE and with CME the VIX and S&P 500 E-mini that was where the main factor was that drove the margin difference. We also put in place a third data, a backup center for to run our data center. So there was a small investment in data and operations that we think provides us with a more stable market approach. We want to get that redundancy in how we run our operations. So it's really a combination of a couple of things that rose, expenses rose, but these were kind of step functions none of these are going to have -- the cost isn't something it's going to be increasing going forward, it was a one-time approach.

Okay, terrific. And then just on thinking about index gross in general, it sort of stepped down a little bit from low-double-digits in a number of years past to now mid-single. It could be a mix shift I know especially, just related to what you just mentioned in terms of these derivatives. But just trying to think about longer-term, how you think about the growth in the index business, can you sort of get back to a double-digit range there and what would be sort of the primary drivers that we should be thinking about in terms of long-term index growth?

Yes. So there is obviously a few components to the revenue. One of them we just mentioned has been very strong in the last few quarters here and which is the volatility aspect of our revenue, which relates to the exchange traded derivative trading volume that goes through. So there is that aspect to it. There is another aspect is, which is the core businesses that relate to AUM growth and AUM growth, which could be a combination of the fees that we get for the actual underlying components of a fund or an ETF or the actual growth in AUMs over time. So that's, that's a very important factor for us. And then we have our data feeds and data business. Generally, we're seeing growth in all of those. I think that the drop of the exchange traded derivative income is what impacted this quarter and also had very positively impacted the third quarter last year. So that's a little bit about that, about the -- that what you see there in the difference between last year and this year. But let me just give you a couple of data points about the growth in the AUM. So if I go way back I go back almost five, six years ago. If you go back into the end of 2013 there was a -- the overall AUMs was only $585 billion. It's now $914 billion as of the end of this quarter. And through that time there's been a combination of factors that have driven that growth. One is the increase in market value. So as the market themselves and the indices themselves go up that is a positive for our revenue. And the other is flows into the funds and you saw that last week in The Wall Street Journal, there was a series, the entire week about the shifting needs of investors and the changes in the investment management industry, which have been benefiting -- have been benefiting firms like ours that are in the passive index field. So we're not giving you any specific projections today. We will provide guidance for 2017 at our next earnings call, but we do continue to see the trend for this industry to be very positive.

Thank you. The next question comes from Alex Kramm from UBS. Your line is now open.

Yes hi good morning everyone. Just wanted to get back to the guidance, which I believe nobody has asked about but when I look at the mid-point here at 112 for the quarter, it doesn't really flip with the lot of the things that you've said, for example, you would expect the debt issuance environment to remain good. I know you also gave some of the impact from the businesses that you're divesting but I think it's like $0.04, $0.05 may be. So you're still arriving at a EPS for the fourth quarter that's basically below around the first quarter, which I think we all would agree it was a pretty tough environment. So can you flush this out a little bit more? What am I missing here? Why you're just being very conservative and so sorry, one more thing, you have raised your guidance like $0.05 each quarter, is there any sort of technicalities in how you approach guidance or what's going on there? Thanks. Sorry for the long question.

I'm going to start and then hand it over to Rob. From the point of view of the factors you actually gave most of the factors which were included in our calculation or understanding of our guidance, which has to do with what could be a very difficult environment. On the one hand, we've seen a very strong third quarter in issuance. It was almost unprecedented the strength that we saw after the Brexit. And we do project based off of the M&A pipeline and what we see for being some pull forward of issuance. And what we see looking at the investment banking calendar and the debt capital markets of depth of the big banks. We do see a strong issuance in the fourth quarter. On the other hand, as you saw with the Brexit that happened last quarter, this could turn on a dime. You could see there is still lot of volatility, there is still lot of factors, which we are very cautious about, you've got the interest rate discussions in the United States, you still have Brexit, you have the elections in United States, which have been quite volatile. So there is still a lot of factors out there that are impacting our external view and that external view has been driving our approach to where we ended up with guidance, but let me hand it over to Rob.

Alex, your math is similar to ours, where there's about a nickel going away from what you'd expect because of the divestitures, offset by the ASR. But we did take the bottom up $0.10 and the top up $0.05. So we're heading now closer but yes the nickel going away for divestitures and we're cautiously optimistic of what's going to happen in the fourth quarter.

Alex, I will point out one other thing, if you look at the last two years, you can see the first quarter and fourth quarter both in 2014 and 2015 were considerably lower on EPS than our second and third quarters. So it's kind of a consistent pattern that you see each year. I can't guarantee it's going to repeat but at least that we see in the past.

All right, that's helpful, thanks for the color. And then just coming back to the point of the restatements of the combining GMI and Platts, first of all, I think if you ask the investors they would ask -- they would argue that you are now bearing one of the best businesses you have in one of the businesses that people do not give a lot of think there is a lot of quality but maybe you disagree. And I guess that is really my question. If you look at the new combined segment now, how much of the business in terms of revenue or EBITDA, do you think is really businesses that are Platts like and may be have gotten lost before like things that are must have very sticky good pricing power there's things like the CUSIP database ratings reselling versus may be similar things that are more discretionary, easier to cut like the desktop businesses. Thank you.

So this is, this is a question about for us what we looked at was partially your question and then beyond that was what are the needs of customers and where do we see the opportunities for further penetration of data and analytics services with different types of client basis. And then going into the backend behind that, how do you run those to be able to deliver the fastest, the best way, and take advantage of our expertise across the company. So within the segment, obviously you're going to have the must-have products of SNL, you've got the must have products of things like CUSIP, in our risk services area, we have products which have become very important for risk management tools that we see as people are doing CCAR modeling and liquidity planning and living well, so there is an advantage to having all of those types of products together. In addition, then you got the Platts part of the business. So you've got a combination. I don't know the numbers off the top of my head that would be better if we talked about that after we put together the new segment information and we send it out. But there is a lot of must have data in there. And then remember that the traditional Cap IQ and SNL desktops have been growing very well. They're growing in somewhere in the high-single digit level for the Cap IQ desktop and over double-digits for the SNL. So even though they might have some sort of discretionary component to them they're still growing at a very good clip and in many cases substituting for other products which might be similar that are much more expensive.

Thank you. The next question comes from Hamzah Mazari from Macquarie. Your line is now open.

Okay. Hi, this is Kevin McVeigh stepping in for Hamzah. I have a question for you guys around margin improvement related to the rating business. There's probably some low-hanging fruits behind on the legal cost coming off, but do you guys see any pricing opportunity remaining still?

Well, if we take a look at the margin in ratings in September 2015 it was about 48% and we improved to 51.3% this quarter. Every quarter for the last year we've been -- we've been driving towards improvement. Last quarter, at the end of June, we had a 54.1% margin. As you've heard us say before, our goal was to remove all of the first areas of things like legal expense of ensuring that we had the right approach to managing our business when it came to compliance and control, embedding new technology tools to have more automation. We have a project going on right now called project simplify, which has the benefits of better control, of better workflow, and eventually it will also bring lower cost with it as well, as you have more streamlined operation. So think about our approach towards margin is continuous improvement. We will keep striving to improve our margins. I'm not going to give you a target necessarily today, but we do have a commitment to strive to keep improving our margin and that would come with a combination of better penetration into the markets where sales force through looking at how we can manage our contracts and our mix on pricing as well as discounting policies. And then on the cost side, through projects like simplify and other ways to manage the business more efficiently and more effectively. So you can see over the last few years, we have had a continuous improvement in our margins, and that's a commitment that we still have.

All right, thanks for that. One other quick question could you give us an update on where you see the upsides in SNL synergies over, next two-year period. You guys spoken about $100 million number before any sense of that.

Yes, we had given you a number and I believe it was at the beginning of the year, it was may be updated which was originally $70 million. We then increased it to a $100 million with a approach where we gave guidance as said that we get approximately half of the $70 million, which was the cost side during this year. We will update you on that, on how we are against those targets at our next call.

Thank you. The next question comes from Vincent Hung from Autonomous. Your line is now open.

Hi, good morning. So on evaluation services fees, sounds like weakness that it due --

Vincent, can you speak a little louder?

Yes, so on the evaluation service fees sounds like most of the weakness that is due to the contract reviews, how much revenue do you usually get from that?

I can't give you -- your question -- can you -- your revenue was how much revenue do we get from where. It can range from 5% to 10% of raised revenue ballpark.

Okay. And on desktop and enterprise and market intelligence looks like the growth has slowed compared to last few quarters, if there anything to highlight there?

No, nothing to highlight there, we continue to see a very good penetration, a good acceptance to the market in that area, so nothing that I'd highlight at this time.

Thank you. Our next question comes from Warren Gardiner of Evercore. Your line is now open.

Great, thanks. I was just wondering if you could give us an update on how you're progressing in terms of regaining some market share in CMBS, kind of feels like that market is starting to pick up a bit. So just wondering how we should kind of expect you guys to participate there?

So during the last quarter, there were 13 CMBS deals of which we were engaged on two of them. So that was a beginning to maybe I could say get our toe in the water. We do continue to rate a large number of the single issuer CMBS transactions. And so we are back engaged in the market, we are engaging with investors and with issuers and continue to be out there showing what we can do. So let's -- let's hope that we keep getting more deals.

Okay. And then strong growth in SNL I think you guys noted some of that came from -- a lot of that came from new user growth. I mean can you guys just give us some color where that's coming from may be just however you want to kind of slice it may be also how much of that may be came from price increases if any?

What we talked about user growth that is coming directly from users. Some of the uptick is also coming from pricing. As you might know, we have an approach towards pricing which is more of an enterprise model. We have decided to work with the sales force where we've merged the sales forces of the old SNL and the old Cap IQ businesses and what we're doing right now is working on an approach to highlight selectively enterprise-wide pricing for Cap IQ and you seen a little bit of it but we're actually rolling it out and phasing it out in 2017. So up until now, what we've seen continues to be mostly based on our prior approach to sales of the two products that with their own sales forces. But more to come on that and this will be another area we will provide more information on it in the next quarter call.

Great, understood.

I apologize of creating confusion by talking about the 12% growth in use of the SNL. We're at the Doug's point. We don't charge on a per user basis to SNL. So it's necessarily direct correlation between user growth and revenue growth. But clearly they do charge based on usage and new users is a part of usage so that kind of feeds into that. And also on the early answer I gave on the 5% to 10% of ratings revenue from TRIS closer to 5%.

Thank you. Our next question comes from Joseph Foresi of Cantor Fitzgerald. Your line is now open.

Hi good morning. Sorry if I missed this but any thoughts on renewing of the overall productivity initiatives for the full company and may be what's on -- what's next on the agenda there?

Thanks, Joseph, this is Rob. So we're continuing to really execute against the SNL targets that we set out and just continuous improvement in all of the divisions as we work through our plan. So no overall announcement on a single program, we're just going to continue looking for productivity in each division as well as flawlessly execute the SNL productivity and synergy targets.

Okay. Do you expect that you may announce something as you go through your five-year plan or is that still, I guess being discussed? I know obviously each individual unit you have done well in increasing the productivity there. But I'm just wondering if there is going to be an overall initiative?

It's possible with our new CFO starting and going to the planning process into next year that's possible.

Okay. I'm going to sneak one more in here on issuance can we get any early thoughts on the ratings business for next year. I know you talked about issuance expectations for 2017. But just wondering what the underlying economic assumptions are there. Thanks.

Joseph sorry about that, we keep it to two questions per person.

Okay, no problem.

Thanks.

Thank you. Your next question is coming from Craig Huber from Huber Research Partners. Your line is now open.

Yes, hi, Doug. First question on the rating side roughly the last year, you've talked about try to move away from some of the contract annual pricing contracts more to transaction based prices. Just want to hear a little bit further about how that's going, how far you think you are into that? How long you think that migration might take here?

What's most important for us is that we are -- we are re-engaging with the market in an approach towards commercial relationships and relationship management that allows us to have individualized discussions with our customers about the most effective way for them to tap the market, it allows us to show the benefits of having a rating. How much you people save by having a rating on their issuance costs and because of that we can have a new dialogue about our contract valuation. So it's hard for me to answer your question in a broad way because net-net, most of our discussions with our customers are one-offs, they're individual. But we are trying to approach the market in a way to get better contract realization overall but it's -- but it's again, it's a relationship management approach professional sales really market by market, customer by customer.

Then also just a quick question for 2017 for pricing across the overall portfolio at S&P, should we assume more the same of 3% to 4% on average?

Craig, we never signal future pricing. We're happy to talk what we've done in the past which you're exactly right. Historically, we're kind of down about 3% to 4% across the businesses per year but we never want to signal future pricing.

Thank you. The next question is coming from Peter Appert from Piper Jaffray. Your line is now open.

Thanks, good morning. So Doug there has been some discussion of fee pressure on the index providers and I'm wondering what you're seeing in terms of any flow through to your business because of that.

Well there we see that this is going to be an important topic in the industry. It's a complicated topic, because most of the pressure, well a lot of pressure is coming at the higher end, full service active management funds that seems to be where lot of pressure is starting and some of that is going into the lower cost mutual funds in ETF providers. One of the things that you saw in the last quarter was that BlackRock cut some of it, its ETF pricing. And that one directly could have a small impact on our business because of the way that our pricing is embedded into those -- into those that fee structure at BlackRock. The flip side is if this leads to higher AUM fees, higher AUM, we could actually benefit from this, if the AUMs go up, and we see much higher volume but this is something that we're watching very carefully. But it is something for the industry to see what will be the evolution of the structure. We believe that our costs generally are very low part of the total cost of managing an ETF or managing a fund. But we are aware that this is an important issue for our customers and we're listening to them and hoping that we can be a part of the solution as they look at how they're going to manage their fee structure.

And Peter the only thing I would like to add is that, it is really nothing new. I mean this kind of pressure on fee structures has been going on for a number of years. Unfortunately the growth in AUM, as Doug said, earlier just 500 billion AUMs over 900 last few years it more than offset that kind of pressure.

Understood. And then Doug just quickly on the Platts business growth has slowed a little bit obviously this year for reasons which I think everyone can understand. Do some of these new product initiatives, the acquisitions et cetera potentially got to drive a re-acceleration in the growth next year, even if the oil environment remains challenging?

I don't know for sure if they will be an allowance to really improve our growth dramatically but what we're targeting with the data and analytics business is to find a new source of growth for the business. So think about it in that sense. We think it's an area that it's fragmented. There are a lot of different players out there, we have the right and we have the opportunity to start bringing in new services, new products. So we look at it as a source of growth, we look at it as source of new area which we already have a good grounding in. And you're right to point out that it is a difficult environment in the oil patch. There are prices are down, if you look at some of the major oil industry clients, their revenues are down by 50% over the last few years. And so they, there is obviously pressure coming from the customer side but we're looking at, if you want to think of it in two ways the diversification of our expertise into some other product areas. And also we hope and believe it could be a source of additional growth.

Thank you. Our next question is coming from Andre Benjamin from Goldman Sachs. Your line is now open.

Hi, good morning. Thanks for getting me in here. I guess on Capital IQ, I was just wondering if you can maybe help frame for us how much revenue comes from data fees. I know that's a growing area that some of your competitors have spoken positively about and any push that you're making to specifically grow that stream relative to the desktop business.

Yes. So the data feeds business, we talk about the CapEx you desktop being roughly a $400 million business, but the enterprise feed is another about a $400 million business, a lot of it does same data only sold to uses really their computers, to back offices, someone does wasn't to key in the stock prices at the end of everyday to value the portfolio. So our mainframe feeds their mainframe. So but yes that's been a, it's historically been part of Cap IQ, as we've evolved the name of that segment over time but that's the relative size and it's kind of been a decent grower nothing extraordinary for us over that timeframe.

Got it. And then as you get SNL fully integrated and that's no longer that the main focus I guess if you look about growing the business going forward, is there any potential that you could look to expand your reaching capabilities beyond the traditional banking and research analysts the use of deep data, I know some of your other competitors are looking do that?

Let me start then Doug, but just about a premise today if you look at Market Intelligence there is 30% of the business or so comes from outside of Wall Street. So we're talking about corporations, we're talking about consulting firms, talking about accounting firms, talking about governments, universities, so good 30% is already outside of Wall Street. I mean you should want to add any, Doug, there?

Yes, I would say that looking at questions slightly from the total business point of view not just SNL Cap IQ the Market Intelligence business. We see that there are -- there is need for more and more Market Intelligence. And as we call it the Central Intelligence for different types of people to make decisions in various ways that require interpretation of market information. So think about all of our businesses that we have now are related to market activities, whether it's fixed income, its equities, its commodities, its loans. We are a business that has the data and the information around market activities and we provide the benchmarks, the pricing, the data tools et cetera. So that's the way we are thinking about our business and we're trying to drive it by going out into the world to see what's changing when it comes to do with our customer needs, with technology, with FinTech, with how we see the regulatory environment is evolving what's actually happening also in growth and political and economic factors, things like the Brexit. And so we take all of those external factors and then, hope that we can interpret them appropriately to grow our business because we're delivering the kinds of products, prices, benchmark data etcetera that's the customers actually need to run their businesses.

Thank you. Thank you. The next question comes from Tim McHugh of William Blair. Your line is now open.

Hi, good morning. This is actually Trevor Romeo in for Tim today. I just have one for you here. Just a follow-up on the high 30s margin target you set for the markets and commodities intelligent segment, the new combined segment. What are some of the incremental changes that you guys will need to make in order to achieve that and do you have a specific timeframe in mind?

What I would like to say is that, take that as our first indication, but give us a couple of weeks to send out the more detailed information about the segments and how they, how it's going to be put together. We will provide more on that and I'd prefer to also discuss this after you've seen that information and then on our next call.

Thank you. Our next question is coming from Bill Warmington of Wells Fargo. Your line is now open.

Good morning everyone and congratulations on a solid quarter and welcome to S&P for Rob.

Thank you.

First question for you on the index piece of the business. The big asset owners today typically pay fee to the asset manager that includes the fee for the management but then also fee for the index. And I've heard the talk about potentially unbundling that fee meaning that, if you could choose any index and you might be more likely to choose a lower price index. I just curious if that's a realistic risk or is it a risk to the pricing.

Today we're seeing a lot of different models that have started cropping up in this industry. But one of the areas which we believe helps our business a lot is that we hold the benchmark, most important global benchmarks the S&P 500, the Dow Jones entire complex of the S&P family of funds and family of indices gives us an important, important set of indices, which end up being part of almost any fund complex or investment complex that anybody ever have. So we think that there is kind of a -- because of the size and scale of what we have, we end up being part of that discussion no matter what angle you come from. We wouldn't be surprised though given the combination of the Department of Labor fiduciary ruling that came out and some other industry factors, low interest rates, and the low growth environment is another impact the shifting funds that are going into retirement and pensions, et cetera. We won't be surprised if there is a active dialogue that goes on from the industry about fee structures and things like that and we would like to be an active part of that.

And so for my second question on the Market Intelligence piece. Capital IQ, I think offers a pretty strong lower priced alternative versus Factset and Bloomberg. And over the past few months, we've been hearing a lot of discussion about cost sensitivity or increased cost sensitivity on the buy side to sell side and just overall Corporate America and I'm just curious if that value proposition is part of what's driving the strong growth within Capital IQ desktops?

Partially we have great respect for Factset and Bloomberg. They're great companies and they deliver high value themselves but we also compete with them sometimes head-to-head and sometimes there is substitute product that many times we're delivering to customers that don't even need or even have a Bloomberg or Factset. So there is a different sorts of customers that we delivered to and what our approach is to show the value of being able to harness the power of so much data and so much analytics in one desktop especially for people that don't need the trading capabilities, it's people that are analysts, risk managers, bankers, investment bankers, regulators, academics, et cetera that need the power of the data, don't necessarily need the instantaneous low latency information that might come with some of the other platforms but that's the way we sell it.

So first of all, let me make a couple of closing remarks. I want to thank Rob McKay for having been an absolutely fabulous partners as Interim CFO. He is our Controller, so he doesn't get off the hook, he still has to hang around and sign off on the book. And we're looking forward to welcoming Ewout Steenbergen to our Company in about a week and half and we're pleased that we were able to speak with all of you today. If you have further questions, please follow-up with Chip and we will provide more of some of the answers, which you asked. We will be able to answer, when we issue our information about the new segment and then we look forward to speaking with you again on our next earnings call. Thank you very much.

That concludes this morning's call. A PDF version of the presenter's slides is available now for downloading from investors.spglobal.com. A replay of this call, including the Q&A session will be available in about two hours. The replay will be maintained on S&P Global's website for 12 months from today and for one month from today by telephone. On behalf of S&P Global, we thank you for participating and wish you a good day.