68Free Cash Flow / Capital Investments
Free Cash Flow
Reconciliation of Non-GAAP Financial Information
Years ended December 31
(dollars in millions)
2009 | 2010SPGI (1, 2, 3, 4, 5, 6, 7, 8, 9, 10) | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |
Cash provided by operating activities | $1,330 | $704 | $924 | $730 | $782 | $1,428 | $356 | $1,560 | $2,016 | $2,064 | $2,776 |
Investment in prepublication costs | (177) | – | – | – | – | – | – | – | – | – | – |
Capital expenditures | (92) | (86) | (92) | (96) | (117) | (92) | (139) | (115) | (123) | (113) | (115) |
Distributions to noncontrolling interest holders | (9) | (34) | (23) | (24) | (75) | (84) | (104) | (116) | (111) | (154) | (143) |
Free cash flow | $1,052 | $584 | $809 | $610 | $590 | $1,252 | $113 | $1,329 | $1,782 | $1,797 | $2,518 |
Tax on gain from sale of J.D. Power | – | – | – | – | – | – | – | 200 | – | – | – |
Tax on gain from sale of SPSE and CMA | – | – | – | – | – | – | – | – | 67 | – | – |
Tax on gain from sale of SPIAS and RigData | – | – | – | – | – | – | – | – | – | – | 13 |
Payment of legal and regulatory settlements | – | – | – | – | – | 35 | 1,624 | 150 | 4 | 180 | 1 |
Legal settlement insurance recoveries | – | – | – | – | – | – | (101) | (77) | – | – | – |
Settlement from prior-year tax audits | – | – | – | – | – | – | – | – | – | 73 | 51 |
Tax benefit from legal settlements | – | – | – | – | – | – | (250) | (24) | (2) | (44) | – |
Free cash flow excluding above items | $1,052 | $584 | $809 | $610 | $590 | $1,287 | $1,386 | $1,578 | $1,851 | $2,006 | $2,583 |
Free cash flow excluding certain items was approximately $2.6 billion in 2019
Notes:
The free cash flow presentation for 2012-2014 reflects McGraw Hill Construction as a discontinued operation, and 2010-2013 reflects McGraw-Hill Education as a discontinued operation. Prior years were not restated
2012 free cash flow was influenced by costs to enable the separation of McGraw-Hill Education and a pension contribution in Q4 2012
2013 free cash flow was influenced by a tax payment in Q1 2013 that was extended from Q4 2012, a legal settlement, and a payment related to an early lease termination
2014 free cash flow was influenced by a tax refund received in Q1 2014 for an overpayment in 2013 and improved collections impacting accounts receivable
2015 free cash flow was influenced by after-tax legal and regulatory settlements and insurance recoveries
2016 free cash flow was influenced by after-tax legal settlements, insurance recoveries, and tax on gain from sale of J.D. Power
2017 free cash flow was influenced by after-tax legal settlements and tax on gain from sale of SPSE and CMA
2018 free cash flow was influenced by after-tax legal settlements and settlement of prior-year tax audits
2019 free cash flow was influenced by legal settlements, settlement of prior-year tax audits, and tax on gain from sale of SPIAS and RigData
2014-2019 free cash flow presentation reflects the adoption of Accounting Standards Update (ASU) 2016-09. Prior years were not restated
Details may not sum to total due to rounding