Attached files
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| 8-K - S&P Global Inc. | v209529_8k.htm |
For Immediate Release
The
McGraw-Hill Companies Reports 4Q EPS of $0.50;
Adjusted
EPS of $0.55
2010
EPS of $2.65; Adjusted EPS of $2.69
2010
Highlights:
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Financial
Services:
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- Standard
& Poor’s Credit Market Services: Double-digit 4Q growth as capital
markets rebound
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- S&P
Investment Services: Strong 4Q revenue growth facilitates launch of new
segment, McGraw-Hill Financial
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§
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Education: Strong year for
operating profit growth, despite weakness in
4Q
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Information & Media: Solid
performance in global energy markets and substantial margin
expansion
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2011
Guidance: $2.79 to $2.89 earnings per diluted share
New York,
NY, February 1, 2011 — The McGraw-Hill Companies (NYSE: MHP) today announced
diluted earnings per share for the fourth quarter of 2010 of $0.50, compared to
$0.53 for the same period last year. On an adjusted basis (see
Exhibit 5), fourth quarter diluted earnings per share were $0.55 versus $0.51
for the same period last year. Fourth quarter 2010 results included
$0.01 dilution for acquisitions.
Page 1 of
15
Net
income in the fourth quarter declined 8.0% to $153.8 million compared to
2009. On an adjusted basis, net income in the fourth quarter
increased by 6.2% to $170.5 million compared to 2009. Revenue in the
fourth quarter grew by 4.2% to $1.5 billion.
For full
year 2010, diluted earnings per share were $2.65 compared to $2.33 for
2009. On an adjusted basis, full year 2010 earnings were
$2.69 compared to $2.37 in 2009. Full year 2010 results included
dilution of $0.02 for acquisitions. Net income increased 13.4% to
$828.1 million. On an adjusted basis, net income for 2010 increased
13.2% to $840.0 million compared to 2009. Revenue for 2010 grew by
3.6% to $6.2 billion.
“Double-digit
EPS growth and the maintenance of a rock-solid financial position were the
hallmarks of our performance in 2010,” said Harold McGraw III, Chairman,
President and Chief Executive Officer of The McGraw-Hill
Companies. “In the fourth quarter, the best performance of the year
by Standard & Poor’s Investment Services set the stage for the launch of our
new segment, McGraw-Hill Financial. Double-digit growth at Standard
& Poor’s Credit Market Services and a fine performance in global energy
markets by Platts also helped offset fourth quarter softness in education
markets.”
(Exhibits
7 and 8 recast revenue and operating profit for the Financial Services segment
into the two new operating segments: McGraw-Hill Financial and Standard &
Poor’s. Recasted financials are provided for 2009 and 2010.)
Page 2 of
15
Financial
Services: Revenue for the segment increased by 13.0% to $778.5
million in the fourth quarter compared to the same period last
year. Operating profit grew by 11.8% to $279.4 million compared to
$250.0 million in the fourth quarter last year. Foreign exchange
rates reduced revenue by $4.8 million, but did not have a material impact on
operating profit.
For the
full year 2010, revenue for Financial Services increased by 8.3% to $2.8 billion
compared to $2.6 billion last year. Operating profit grew by 6.2% to
$1.1 billion in 2010, compared to $1.0 billion in 2009. Adjusted
operating profit grew by 4.1% to $1.1
billion in 2010 compared to $1.0 billion in 2009. Foreign exchange
rates had an immaterial effect on revenue and operating profit in
2010.
Standard
& Poor’s Credit Market Services’ revenue increased by 11.4% to $527.1
million in the fourth quarter and by 9.2% to $1.9 billion for the full year 2010
compared to 2009.
Standard
& Poor’s Investment Services’ revenue, including $12.7 million from the
acquisition of TheMarkets.com, grew by 16.5% to $251.4 million in the fourth
quarter and by 6.5% to $918.1 million for the full year 2010 compared to
2009.
Record
worldwide corporate high-yield new issue dollar volume, and a surge in bank loan
ratings and the public finance market helped produce a 30.6% increase in
transaction revenue to $199.9 million, or 37.9% of Standard & Poor’s Credit
Markets Services’ fourth quarter revenue. In the fourth quarter of
2009, transactions accounted for 32.3% of Standard & Poor’s Credit Market
Services’ revenue. For 2010, transaction revenue grew by 22.9% to
$662.8 million as new issue dollar volume for high-yield corporate bonds in the
United States and Europe, and U.S. public finance set records for the
year.
Page 3 of
15
Non-transaction
revenue at Standard & Poor’s Credit Market Services, which includes annual
contracts, surveillance and subscription fees, grew by 2.1% in the fourth
quarter to $327.2 million compared to the same period last year. For
the full year 2010, non-transaction revenue increased by 3.1% to $1.2 billion,
and represented 65.3% of Standard & Poor’s Credit Market Services’ total
revenue compared to 69.2% in 2009.
U.S.
revenue for Standard & Poor’s Credit Market Services outpaced international
revenue for the fourth quarter and the full year in 2010. In
the fourth quarter, U.S. revenue grew by 16.6% to $279.5 million and accounted
for 53.0% of the total for 2010. For 2010, it was up by 13.2% to $1.0
billion and represented 54.3% of the total. International revenue
grew by 6.0% in the fourth quarter to $247.6 million and by 4.8% for 2010 to
$872.7 million.
New issue
dollar volume grew by 15.9% in the U.S. market in the fourth quarter compared to
the same period last year, according to S&P estimates and information from
Thomson Financial and Harrison Scott Publications. U.S. corporate
issuance was up 10.9% as refinancing activity, tightening credit spreads, and
investors’ search for yield helped produce a 73.8% increase in speculative-grade
issuance in the fourth quarter. Public finance issuance was up
by 15.3%. Mortgage-backed securities grew by 8.9%. Asset-backed
securities declined by 8.8%. Issuance of collateralized debt
obligations climbed to $19.1 billion from less than $1 billion in the fourth
quarter of 2009. In Europe, total new issue dollar volume declined in
the fourth quarter by 8.4%.
Page 4 of
15
Standard
& Poor’s Investment Services turned in the strongest revenue growth of the
year in the fourth quarter to produce 32.3%, or $251.4 million of Financial
Services’ top line, compared to 31.3%, or $215.8 million for the same period
last year. For 2010, Standard & Poor’s Investment Services
contributed 32.5%, or $918.1 million of the segment’s revenue versus 33.0%, or
$861.9 million in 2009.
Solid
performances in the fourth quarter by S&P Indices, Capital IQ, and the
acquisition of TheMarkets.com offset declines in investment research products
and services for retail markets.
Recovery
in global equity markets and a substantial increase in the number of exchange-
traded funds using S&P indices contributed to the growth of assets under
management. At the end of the fourth quarter, assets under management
in exchange-traded funds based on S&P indices climbed to $300.3 billion, a
21.6% year-over-year increase. There were 301 exchange-traded funds
based on S&P indices at the end of 2010 versus 217 in 2009. The
average daily volume of contracts for major exchange-traded derivatives based on
S&P indices increased by 4.6% in the fourth quarter to
2,963,000. S&P is paid a royalty each time a contract is
traded.
Page 5 of
15
Capital
IQ added new functionality and more new clients in the fourth quarter to end
2010 with more than 3,400 customers, an increase of 15.8% for the
year.
Education: Revenue
for this segment in the fourth quarter of 2010 decreased by 4.6% to $496.3
million compared to the same period last year. Operating profit declined by
51.7% to $16.2 million. Foreign exchange rates had no material impact
on revenue or operating profit.
For the
full year 2010, revenue increased by 1.9% to $2.4 billion. Operating
profit for the segment grew by 31.7% to $363.4 million compared to $276.0
million in 2009. Adjusted operating profit grew by 25.0% to $359.6
million compared to $287.6 million in 2009. Foreign exchange rates
increased revenue by $11.3 million, but had an immaterial impact on operating
profit.
The
McGraw-Hill School Education Group’s revenue declined by 7.7% in the fourth
quarter to $138.2 million and was $1.1 billion in 2010, flat when compared to
2009.
The
McGraw-Hill Higher Education, Professional and International Group’s revenue
declined 3.3% to $358.0 million in the fourth quarter, but grew by 3.8% to $1.3
billion in 2010 compared to 2009.
Page 6 of
15
Late
decisions to purchase basal materials in adoption states including Texas,
Florida, South Carolina, and New Mexico could not offset a decline in open
territory sales in the fourth quarter for the McGraw-Hill School Education
Group. In the fourth quarter of 2009, the McGraw-Hill School
Education Group benefited from large federal stimulus-funded orders of
intervention materials, which are designed to help students who have fallen
behind or need extra help to reach grade-level standards.
Revenue
in testing was up slightly in the fourth quarter of 2010, benefiting from gains
by the award-winning Acuity program, the leading
product in the formative assessment market. New contracts for Acuity were signed by New
York City and Indiana during the fourth quarter. A new state-level
program in New Mexico also contributed to the gain.
The
bright spot in the 2010 elementary-high school business for McGraw-Hill School
Education was the state new adoption market; with strong performances in Texas
K–5 reading and Florida 6–12 math, the McGraw-Hill School Education Group
captured approximately 30% of the estimated $850 million to $875 million state
new adoption market in 2010. Sales declined in the open territory and
in testing in 2010. The decrease in testing occurred primarily
because of the planned discontinuation in 2010 of custom contracts in Arizona,
California, and Florida.
The
McGraw-Hill Higher Education, Professional and International Group benefited in
2010 from growing enrollments in the U.S. college market and robust sales of
digital products and services. Fourth quarter results were affected
by a December sales decline in the U.S. college market and softness in
international markets.
Page 7 of
15
For 2010,
all four of McGraw-Hill Higher Education’s major product lines (Humanities,
Social Sciences and Languages; Science, Engineering and Math; Business and
Economics; and Career Education) produced gains.
McGraw-Hill
Connect, the industry’s most advanced online homework management system, and
other interactive study, assessment and tutoring products for the college market
produced double-digit growth in 2010. Through December, registration
for these products and services has grown to 2.4 million, a 20% year-over-year
increase.
In the
fourth quarter of 2010, McGraw-Hill Higher Education’s best-sellers
were:
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Ober,
Keyboarding,
11th
Edition
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Nickels,
Understanding
Business, 9th
Edition
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Sanderson,
Computers in the Medical
Office, 7th
Edition
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Shier,
Hole’s Human Anatomy and
Physiology, 12th
Edition
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Lucas,
The Art of Public
Speaking, 10th
Edition
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In
professional publishing, the product mix continued to shift from print to
digital. Sales of digital products to retail and professional markets
in science, medicine, and technology grew at a double-digit rate in the fourth
quarter and for the year.
Page 8 of
15
By the
end of 2010, approximately 6,000 e-book titles were available. The
best-selling e-books from professional publishing in 2010 were:
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Crucial Conversations: Tools
for Talking When the Stakes Are High, by Kerry
Patterson, et al.
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Security Analysis,
6th
Edition by Benjamin Graham and David
Dodd
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Presentation Secrets of Steve
Jobs, by Carmine
Gallo
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Current Medical Diagnosis and
Treatment 2010, 49th
Edition
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How to Talk to Anyone,
2nd
Edition by Leil Lowndes
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In
international markets, revenue declined in the fourth quarter, but was up
slightly for the year. Both Asia and India benefited from growth in
English-language training sales.
Information &
Media: Revenue for this segment in the fourth quarter
decreased by 1.6% to $249.3 million compared to the same period last year, but
grew by 7.6% excluding the divestiture of BusinessWeek on December 1,
2009. Fourth quarter operating profit, including a restructuring
charge of $10.6 million, declined by 14.6% to $39.2 million compared to $45.9
million in 2009, which included a $10.5 million pre-tax gain from the sale of
BusinessWeek. Adjusted
operating profit grew by 40.8% to $49.8 million compared to $35.4 million in
2009.
For the
full year 2010, revenue declined 4.9% to $907.5 million compared to 2009, but
grew 6.2% excluding the divestiture of BusinessWeek. Operating
profit in 2010 increased 73.1% to $160.4 million compared to $92.7 million in
2009. Adjusted operating profit for 2010 increased 98.6% to $171.0
million compared to $86.1 million in 2009.
Page 9 of
15
The
Business-to-Business Group’s revenue in the fourth quarter decreased by 4.0% to
$220.9 million compared to $230.0 million in 2009, which includes revenue of
$21.6 million from BusinessWeek for two
months. For the full year 2010, the Business-to-Business Group’s
revenue declined by 7.0% to $811.5 million, but grew 4.9% excluding BusinessWeek. The
Business-to-Business Group brands include Aviation Week, J.D. Power and
Associates, McGraw-Hill Construction, and Platts.
A strong
performance by Platts in global energy markets and J.D. Power and Associates’
solid growth in the domestic auto business in the fourth quarter offset softness
at McGraw-Hill Construction.
Platts
produced solid growth in 2010 in both U.S. and international
markets. To expand its services in energy markets, Platts acquired
BENTEK Energy on January 3, 2011, and announced the acquisition of Oil Price
Information Service (OPIS), which is subject to regulatory approval and
customary closing conditions. BENTEK Energy is a leading provider of
fundamental data and analysis for the natural gas market in North
America. OPIS is a leader in news and price information for the
wholesale and retail petroleum markets in North America.
Page 10
of 15
The
Broadcasting Group’s revenue grew by 21.7% in the fourth quarter to $28.4
million compared to the same period last year. For the full year
2010, the Broadcasting Group’s revenue grew by 18.3% to $96.0
million. Strong political advertising and improvement in national and
local-time sales were key factors in the Broadcasting Group’s fourth quarter and
full-year performance.
Corporate expense in the
fourth quarter of 2010 increased by $25.9 million to $62.3 million and by $53.0
million to $180.0 million for the full year. Adjusted corporate
expense, which excludes a one-time charge of $15.6 million related to subleasing
excess space in the Company’s New York facilities, increased by $10.3 million to
$46.7 million in the fourth quarter and by $37.4 million to $164.4 million for
the full year. The increases were primarily driven by growth in
incentive compensation compared to reduced levels in 2009 and additional vacant
space because of divestitures.
Free cash flow after dividends
(see Exhibits 3 and 11), driven by strong operating results, grew to $880.7
million in 2010, an increase of $110.8 million. The Company took
advantage of the strong free cash flow to make a $125 million payment to its
U.S. pension plan in the fourth quarter. The Company ended 2010 with
a net cash position of $349.5 million compared to $36.7 million on December 31,
2009. At year-end 2010, cash and equivalents and short-term
investments were $1.5 billion. Debt was $1.2
billion.
Page 11
of 15
The Outlook: “We
expect to continue building on the recovery of earnings in 2010 and look forward
to another year of growth in 2011,” said Mr. McGraw. “Our guidance
for 2011 diluted earnings per share is $2.79 to $2.89.”
Comparison of Adjusted Information to
U.S. GAAP Information: Adjusted earnings per share, adjusted net income,
adjusted operating profit and adjusted corporate expense are non-GAAP financial
measures contained in this earnings release that are derived from the Company’s
continuing operations. This information is provided in order to allow investors
to make meaningful comparisons of the Company’s operating performance
between periods and to view the Company’s business from the same perspective as
Company management. These non-GAAP measures may be
different than similar measures used by other companies. Reconciliations for the
differences between non-GAAP measures used in this earnings release and
comparable financial measures calculated in accordance with U.S. GAAP for the
three- and twelve-month periods ended December 31, 2010,
and 2009 are attached as Exhibits 5, 8 and 11.
Page 12
of 15
Conference Call/Webcast
Details: The Corporation’s senior management will review the
fourth quarter earnings results on a conference call scheduled for this morning,
February 1, at 8:30 AM Eastern Time. This call is open to all interested
parties. Discussions may include forward-looking information. Additional
information presented on the conference call may be made available on the
Corporation’s Investor Relations Website at http://www.mcgraw-hill.com/investor_relations.
The
Webcast will be available live and in replay at http://investor.mcgraw-hill.com/phoenix.zhtml?p=irol-eventDetails&c=96562&eventID=3646443.
(Please copy and paste URL into Web browser.)
Telephone
access is available. Domestic participants may call (888) 323-5423;
international participants may call +1 (415) 228-5016 (long distance charges
will apply). The passcode is McGraw-Hill and the conference leader is Harold
McGraw III. A recorded telephone replay will be available approximately two
hours after the meeting concludes and will remain available until March 1, 2011.
Domestic participants may call (866) 414-6066; international participants may
call +1 (203) 369-0675 (long distance charges will apply). No passcode is
required.
The
forward-looking statements in this news release involve risks and uncertainties
and are subject to change based on various important factors, including
worldwide economic, financial, liquidity, political and regulatory conditions;
the health of debt (including U.S. residential mortgage-backed securities and
collateralized debt obligations) and equity markets, including possible future
interest rate changes; the health of the economy and in advertising; the level
of expenditures and state new adoptions and open territory sales in the
education market; the successful marketing of competitive products; and the
effect of competitive products and pricing.
Page 13
of 15
About The McGraw-Hill
Companies: Founded in 1888, The McGraw-Hill Companies is a leading global
financial information and education company that helps professionals and
students succeed in the Knowledge Economy. Leading brands include
Standard & Poor’s, McGraw-Hill Education, Platts energy information services
and J.D. Power and Associates. The Corporation has approximately
21,000 employees with more than 280 offices in 40 countries. Sales in
2010 were $6.2 billion. Additional information is available at http://www.mcgraw-hill.com.
Investor
Relations: http://www.mcgraw-hill.com/investor_relations
Get news
direct from McGraw-Hill via RSS:
http://investor.mcgraw-hill.com/phoenix.zhtml?c=96562&p=newsRSS
Release
issued: February 1, 2011
* *
*
Contacts
for The McGraw-Hill Companies:
Investor
Relations:
Donald S.
Rubin
Senior
Vice President, Investor Relations
(212)
512-4321 (office)
donald_rubin@mcgraw-hill.com
Page 14
of 15
News
Media:
Jason
Feuchtwanger
Director,
Corporate Media Relations
(212)
512-3151 (office)
jason_feuchtwanger@mcgraw-hill.com
Page 15
of 15
The
McGraw-Hill Companies
Consolidated
Statements of Income
Periods
ended December 31, 2010 and 2009
(dollars
in thousands, except per share data)
|
(unaudited)
|
Three Months
|
Twelve Months
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||||||||||||||||||||||
|
2010
|
2009
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% Favorable
(Unfavorable)
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2010
|
2009
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% Favorable
(Unfavorable)
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|||||||||||||||||||
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Revenue
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$ | 1,524,079 | $ | 1,462,492 | 4.2 | % | $ | 6,168,331 | $ | 5,951,782 | 3.6 | % | ||||||||||||
|
Expenses
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1,251,588 | 1,180,085 | (6.1 | )% | 4,758,330 | 4,692,742 | (1.4 | )% | ||||||||||||||||
|
Other
(income) loss
|
- | (10,545 | ) | N/M | (11,058 | ) | 3,304 | N/M | ||||||||||||||||
|
Income
from operations
|
272,491 | 292,952 | (7.0 | )% | 1,421,059 | 1,255,736 | 13.2 | % | ||||||||||||||||
|
Interest
expense, net
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19,445 | 19,950 | 2.5 | % | 81,643 | 76,867 | (6.2 | )% | ||||||||||||||||
|
Income
before taxes on income
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253,046 | 273,002 | (7.3 | )% | 1,339,416 | 1,178,869 | 13.6 | % | ||||||||||||||||
|
Provision
for taxes on income
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92,108 | 99,373 | 7.3 | % | 487,547 | 429,108 | (13.6 | )% | ||||||||||||||||
|
Net
income
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160,938 | 173,629 | (7.3 | )% | 851,869 | 749,761 | 13.6 | % | ||||||||||||||||
|
Less:
net income attributable to noncontrolling interests
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(7,095 | ) | (6,335 | ) | 12.0 | % | (23,806 | ) | (19,259 | ) | 23.6 | % | ||||||||||||
|
Net
income attributable to The McGraw-Hill Companies, Inc.
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$ | 153,843 | $ | 167,294 | (8.0 | )% | $ | 828,063 | $ | 730,502 | 13.4 | % | ||||||||||||
|
Earnings
per common share:
|
||||||||||||||||||||||||
|
Basic
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$ | 0.50 | $ | 0.54 | (7.4 | )% | $ | 2.68 | $ | 2.34 | 14.5 | % | ||||||||||||
|
Diluted
|
$ | 0.50 | $ | 0.53 | (5.7 | )% | $ | 2.65 | $ | 2.33 | 13.7 | % | ||||||||||||
|
Dividend
per common share
|
$ | 0.235 | $ | 0.225 | 4.4 | % | $ | 0.94 | $ | 0.90 | 4.4 | % | ||||||||||||
|
Average
number of common shares outstanding:
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||||||||||||||||||||||||
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Basic
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305,928 | 312,687 | 309,379 | 312,223 | ||||||||||||||||||||
|
Diluted
|
310,323 | 314,482 | 312,220 | 313,296 | ||||||||||||||||||||
N/M - not
meaningful
Exhibit
1
The
McGraw-Hill Companies
Condensed
Consolidated Balance Sheets
December
31, 2010 and 2009
(dollars
in thousands)
|
(unaudited)
|
2010
|
2009
|
||||||
|
Assets:
|
||||||||
|
Cash
and equivalents
|
$ | 1,525,596 | $ | 1,209,927 | ||||
|
Other
current assets
|
1,769,015 | 1,726,469 | ||||||
|
Total
current assets
|
3,294,611 | 2,936,396 | ||||||
|
Prepublication
costs, net
|
364,984 | 460,843 | ||||||
|
Property
and equipment, net
|
548,767 | 579,796 | ||||||
|
Goodwill
and other intangible assets, net
|
2,550,845 | 2,229,242 | ||||||
|
Other
non-current assets
|
287,354 | 268,973 | ||||||
|
Total
assets
|
$ | 7,046,561 | $ | 6,475,250 | ||||
|
Liabilities
and Equity:
|
||||||||
|
Unearned
revenue
|
$ | 1,205,744 | $ | 1,115,357 | ||||
|
Other
current liabilities
|
1,475,130 | 1,336,597 | ||||||
|
Long-term
debt
|
1,197,965 | 1,197,791 | ||||||
|
Pension,
other postretirement benefits and other non-current
liabilities
|
876,331 | 896,328 | ||||||
|
Total
liabilities
|
4,755,170 | 4,546,073 | ||||||
|
Total
equity
|
2,291,391 | 1,929,177 | ||||||
|
Total
liabilities and equity
|
$ | 7,046,561 | $ | 6,475,250 | ||||
Exhibit
2
The
McGraw-Hill Companies
Condensed
Consolidated Statements of Cash Flows
Years
ended December 31, 2010 and 2009
(dollars
in thousands)
|
(unaudited)
|
2010
|
2009
|
||||||
|
Operating
Activities:
|
||||||||
|
Net
income
|
$ | 851,869 | $ | 749,761 | ||||
|
Adjustments
to reconcile net income to cash provided by operating
activities:
|
||||||||
|
Depreciation
(including amortization of technology projects)
|
125,492 | 137,339 | ||||||
|
Amortization
of intangibles
|
45,595 | 52,720 | ||||||
|
Amortization
of prepublication costs
|
246,312 | 270,469 | ||||||
|
Stock-based
compensation
|
66,485 | 22,268 | ||||||
|
Other
|
117,775 | 52,166 | ||||||
|
Net
changes in operating assets and liabilities
|
4,651 | 45,218 | ||||||
|
Cash
provided by operating activities
|
1,458,179 | 1,329,941 | ||||||
|
Investing
Activities:
|
||||||||
|
Investment
in prepublication costs
|
(150,842 | ) | (176,996 | ) | ||||
|
Capital
expenditures
|
(115,443 | ) | (92,290 | ) | ||||
|
Acquisitions,
including contingent payments, net of cash acquired
|
(364,396 | ) | - | |||||
|
Proceeds
from dispositions and other
|
33,131 | (9,406 | ) | |||||
|
Cash
used for investing activities
|
(597,550 | ) | (278,692 | ) | ||||
|
Financing
Activities:
|
||||||||
|
Repayments
on short-term debt, net
|
- | (70,000 | ) | |||||
|
Dividends
paid to shareholders
|
(292,257 | ) | (281,553 | ) | ||||
|
Dividends
paid to noncontrolling interests
|
(18,906 | ) | (9,162 | ) | ||||
|
Repurchase
of treasury shares
|
(255,808 | ) | - | |||||
|
Exercise
of stock options and other
|
33,562 | 25,503 | ||||||
|
Cash
used for financing activities
|
(533,409 | ) | (335,212 | ) | ||||
|
Effect
of exchange rate changes on cash
|
(11,551 | ) | 22,219 | |||||
|
Net
change in cash and equivalents
|
315,669 | 738,256 | ||||||
|
Cash
and equivalents at beginning of year
|
1,209,927 | 471,671 | ||||||
|
Cash
and equivalents at end of year
|
$ | 1,525,596 | $ | 1,209,927 | ||||
Exhibit
3
The
McGraw-Hill Companies
Operating
Results by Segment
Periods
ended December 31, 2010 and 2009
(dollars
in millions)
|
(unaudited)
|
Three Months
|
Twelve Months
|
||||||||||||||||||||||
|
Revenue
|
Revenue
|
|||||||||||||||||||||||
|
2010
|
2009
|
% Favorable
(Unfavorable)
|
2010
|
2009
|
% Favorable
(Unfavorable)
|
|||||||||||||||||||
|
Financial
Services
|
$ | 778.5 | $ | 689.2 | 13.0 | % | $ | 2,827.7 | $ | 2,610.1 | 8.3 | % | ||||||||||||
|
McGraw-Hill
Education
|
496.3 | 520.0 | (4.6 | )% | 2,433.1 | 2,387.8 | 1.9 | % | ||||||||||||||||
|
Information
& Media
|
249.3 | 253.3 | (1.6 | )% | 907.5 | 953.9 | (4.9 | )% | ||||||||||||||||
|
Total
revenue
|
$ | 1,524.1 | $ | 1,462.5 | 4.2 | % | $ | 6,168.3 | $ | 5,951.8 | 3.6 | % | ||||||||||||
|
Segment
Expenses
|
Segment
Expenses
|
|||||||||||||||||||||||
|
2010
|
2009
|
%
Favorable
(Unfavorable)
|
2010
|
2009
|
%
Favorable
(Unfavorable)
|
|||||||||||||||||||
|
Financial
Services
|
$ | 499.1 | $ | 439.2 | (13.6 | )% | $ | 1,750.5 | $ | 1,596.0 | (9.7 | )% | ||||||||||||
|
McGraw-Hill
Education
|
480.1 | 486.5 | 1.3 | % | 2,069.7 | 2,111.8 | 2.0 | % | ||||||||||||||||
|
Information
& Media
|
210.1 | 207.4 | (1.3 | )% | 747.1 | 861.2 | 13.3 | % | ||||||||||||||||
|
Total
segment expenses
|
$ | 1,189.3 | $ | 1,133.1 | (5.0 | )% | $ | 4,567.3 | $ | 4,569.0 | - | |||||||||||||
|
Operating
Profit
|
Operating
Profit
|
|||||||||||||||||||||||
|
2010
|
2009
|
%
Favorable
(Unfavorable)
|
2010
|
2009
|
%
Favorable
(Unfavorable)
|
|||||||||||||||||||
|
Financial
Services
|
$ | 279.4 | $ | 250.0 | 11.8 | % | $ | 1,077.3 | $ | 1,014.1 | 6.2 | % | ||||||||||||
|
McGraw-Hill
Education
|
16.2 | 33.5 | (51.7 | )% | 363.4 | 276.0 | 31.7 | % | ||||||||||||||||
|
Information
& Media
|
39.2 | 45.9 | (14.6 | )% | 160.4 | 92.7 | 73.1 | % | ||||||||||||||||
|
Total
operating segments
|
334.8 | 329.4 | 1.6 | % | 1,601.1 | 1,382.8 | 15.8 | % | ||||||||||||||||
|
General
corporate expense
|
(62.3 | ) | (36.4 | ) | (71.0 | )% | (180.0 | ) | (127.0 | ) | (41.8 | )% | ||||||||||||
|
Total
operating profit *
|
$ | 272.5 | $ | 293.0 | (7.0 | )% | $ | 1,421.1 | $ | 1,255.8 | 13.2 | % | ||||||||||||
|
*
|
Income
from operations
|
Note -
Totals may not sum and percentages may not recalculate due to
rounding
Exhibit
4
The
McGraw-Hill Companies
Operating
Results by Segment - As Reported vs. As Adjusted
Periods
ended December 31, 2010 and 2009
(dollars
in millions)
|
(unaudited)
|
Three
months ended
December
31, 2010
|
Three
months ended
December
31, 2009
|
%
Favorable
(Unfavorable)
|
|||||||||||||||||||||||||||||
|
As
Reported
|
Non-GAAP
Adjustments
|
As
Adjusted
|
As
Reported
|
Non-GAAP
Adjustments
|
As
Adjusted
|
As
Reported
|
As
Adjusted
|
|||||||||||||||||||||||||
|
Financial
Services
|
$ | 279.4 | $ | - | $ | 279.4 | $ | 250.0 | $ | - | $ | 250.0 | 11.8 | % | 11.8 | % | ||||||||||||||||
|
McGraw-Hill
Education
|
16.2 | - | 16.2 | 33.5 | - | 33.5 | (51.7 | )% | (51.7 | )% | ||||||||||||||||||||||
|
Information
& Media
|
39.2 | 10.6 | (a) | 49.8 | 45.9 | (10.5 | ) (c) | 35.4 | (14.6 | )% | 40.8 | % | ||||||||||||||||||||
|
Segment
operating profit
|
334.8 | 10.6 | 345.4 | 329.4 | (10.5 | ) | 318.8 | 1.6 | % | 8.3 | % | |||||||||||||||||||||
|
General
corporate expense
|
(62.3 | ) | 15.6 | (b) | (46.7 | ) | (36.4 | ) | - | (36.4 | ) | (71.0 | )% | (28.2 | )% | |||||||||||||||||
|
Interest
expense, net
|
(19.4 | ) | - | (19.4 | ) | (20.0 | ) | - | (20.0 | ) | 2.5 | % | 2.5 | % | ||||||||||||||||||
|
Income
before taxes on income
|
253.0 | 26.2 | 279.2 | 273.0 | (10.5 | ) | 262.4 | (7.3 | )% | 6.4 | % | |||||||||||||||||||||
|
Provision
for taxes on income
|
(92.1 | ) | (9.5 | ) | (101.6 | ) | (99.4 | ) | 3.8 | (95.5 | ) | 7.3 | % | (6.4 | )% | |||||||||||||||||
|
Net
income
|
160.9 | 16.7 | 177.6 | 173.6 | (6.7 | ) | 166.9 | (7.3 | )% | 6.4 | % | |||||||||||||||||||||
|
Noncontrolling
interests net income
|
(7.1 | ) | - | (7.1 | ) | (6.3 | ) | - | (6.3 | ) | 12.0 | % | 12.0 | % | ||||||||||||||||||
|
Net
income attributable to MHP
|
153.8 | 16.7 | 170.5 | 167.3 | (6.7 | ) | 160.6 | (8.0 | )% | 6.2 | % | |||||||||||||||||||||
|
Diluted
earnings per common share
|
$ | 0.50 | $ | 0.05 | $ | 0.55 | $ | 0.53 | $ | (0.02 | ) | $ | 0.51 | (5.7 | )% | 7.8 | % | |||||||||||||||
|
(unaudited)
|
Twelve
months ended
December
31, 2010
|
Twelve
months ended
December
31, 2009
|
%
Favorable (Unfavorable)
|
|||||||||||||||||||||||||||||
|
As
Reported
|
Non-GAAP
Adjustments
|
As
Adjusted
|
As
Reported
|
Non-GAAP
Adjustments
|
As
Adjusted
|
As
Reported
|
As
Adjusted
|
|||||||||||||||||||||||||
|
Financial
Services
|
$ | 1,077.3 | $ | (7.3 | ) (d) | $ | 1,070.0 | $ | 1,014.1 | $ | 13.4 | (f) | $ | 1,027.5 | 6.2 | % | 4.1 | % | ||||||||||||||
|
McGraw-Hill
Education
|
363.4 | (3.8 | ) (e) | 359.6 | 276.0 | 11.6 | (g) | 287.6 | 31.7 | % | 25.0 | % | ||||||||||||||||||||
|
Information
& Media
|
160.4 | 10.6 | (a) | 171.0 | 92.7 | (6.6 | ) (h) | 86.1 | 73.1 | % | 98.6 | % | ||||||||||||||||||||
|
Segment
operating profit
|
1,601.1 | (0.5 | ) | 1,600.6 | 1,382.8 | 18.5 | 1,401.3 | 15.8 | % | 14.2 | % | |||||||||||||||||||||
|
General
corporate expense
|
(180.0 | ) | 15.6 | (b) | (164.4 | ) | (127.0 | ) | - | (127.0 | ) | (41.8 | )% | (29.5 | )% | |||||||||||||||||
|
Interest
expense, net
|
(81.6 | ) | - | (81.6 | ) | (76.9 | ) | - | (76.9 | ) | (6.2 | )% | (6.2 | )% | ||||||||||||||||||
|
Income
before taxes on income
|
1,339.4 | 15.1 | 1,354.5 | 1,178.9 | 18.5 | 1,197.3 | 13.6 | % | 13.1 | % | ||||||||||||||||||||||
|
Provision
for taxes on income
|
(487.5 | ) | (5.5 | ) | (493.1 | ) | (429.1 | ) | (6.7 | ) | (435.8 | ) | (13.6 | )% | (13.1 | )% | ||||||||||||||||
|
Net
income
|
851.8 | 9.6 | 861.5 | 749.8 | 11.8 | 761.6 | 13.6 | % | 13.1 | % | ||||||||||||||||||||||
|
Noncontrolling
interests net income
|
(23.8 | ) | 2.3 | (d) | (21.5 | ) | (19.3 | ) | - | (19.3 | ) | 23.6 | % | 11.5 | % | |||||||||||||||||
|
Net
income attributable to MHP
|
828.1 | 11.9 | 840.0 | 730.5 | 11.8 | 742.2 | 13.4 | % | 13.2 | % | ||||||||||||||||||||||
|
Diluted
earnings per common share
|
$ | 2.65 | $ | 0.04 | $ | 2.69 | $ | 2.33 | $ | 0.04 | $ | 2.37 | 13.7 | % | 13.5 | % | ||||||||||||||||
|
(a)
|
Restructuring
charge at our Information & Media segment in Q4
2010
|
|
(b)
|
Charge
for subleasing excess space in our New York facilities in Q4
2010
|
|
(c)
|
Gain
on the sale of BusinessWeek in Q4
2009
|
|
(d)
|
Gain
on the sale of certain equity interests at our Financial Services segment
in Q3 2010
|
|
(e)
|
Gain
on the sale of McGraw-Hill Education's Australian secondary education
business in Q3 2010
|
|
(f)
|
Includes
a $13.8 million loss on the sale of Vista Research, Inc. and a net
restructuring reversal of $(0.4)
million
|
|
(g)
|
Net
restructuring charge at our McGraw-Hill Education
segment
|
|
(h)
|
Includes
a $10.5 million gain on the sale of BusinessWeek and a net
restructuring charge of $4.0
million
|
Note -
Totals may not sum and percentages may not recalculate due to
rounding
Exhibit
5
The
McGraw-Hill Companies
Financial
Services Segment - Credit Market Services
Periods
ended December 31, 2010 and 2009
(dollars
in millions)
Transaction
vs. Non-Transaction Revenue
|
(unaudited)
|
||||||||||||
|
2010
|
2009
|
% Change
|
||||||||||
|
Three
Months
|
||||||||||||
|
Transaction
revenue (a)
|
$ | 199.9 | $ | 153.0 | 30.6 | % | ||||||
|
Non-transaction
revenue (b)
|
327.2 | 320.3 | 2.1 | % | ||||||||
|
Total
Credit Market Services revenue
|
$ | 527.1 | $ | 473.4 | 11.4 | % | ||||||
|
2010
|
2009
|
% Change
|
||||||||||
|
Twelve
Months
|
||||||||||||
|
Transaction
revenue
|
$ | 662.8 | $ | 539.2 | 22.9 | % | ||||||
|
Non-transaction
revenue
|
1,246.9 | 1,209.0 | 3.1 | % | ||||||||
|
Total
Credit Market Services revenue
|
$ | 1,909.7 | $ | 1,748.2 | 9.2 | % | ||||||
|
(a)
|
Revenue
related to ratings of publicly-issued debt, bank loan ratings and
corporate credit estimates
|
|
(b)
|
Revenue
primarily from annual fees for frequent issuer programs, surveillance and
subscriptions
|
Domestic
vs. International Revenue
|
(unaudited)
|
||||||||||||
|
2010
|
2009
|
%
Change
|
||||||||||
|
Three
Months
|
||||||||||||
|
Domestic
revenue
|
$ | 279.5 | $ | 239.7 | 16.6 | % | ||||||
|
International
revenue
|
247.6 | 233.7 | 6.0 | % | ||||||||
|
Total
Credit Market Services revenue
|
$ | 527.1 | $ | 473.4 | 11.4 | % | ||||||
|
2010
|
2009
|
%
Change
|
||||||||||
|
Twelve
Months
|
||||||||||||
|
Domestic
revenue
|
$ | 1,037.0 | $ | 915.8 | 13.2 | % | ||||||
|
International
revenue
|
872.7 | 832.4 | 4.8 | % | ||||||||
|
Total
Credit Market Services revenue
|
$ | 1,909.7 | $ | 1,748.2 | 9.2 | % | ||||||
Note -
Totals may not sum and percentages may not recalculate due to
rounding
Exhibit
6
Recasted
Standard & Poor's and McGraw-Hill Financial Operating Results - As
Reported
(dollars
in millions)
|
(unaudited)
|
2010
|
|||||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's
|
$ | 401.3 | $ | 405.0 | $ | 417.5 | $ | 471.6 | $ | 1,695.4 | ||||||||||
|
McGraw-Hill
Financial
|
278.8 | 293.6 | 294.3 | 321.8 | 1,188.5 | |||||||||||||||
|
Intersegment
Revenue
|
(13.2 | ) | (13.8 | ) | (14.4 | ) | (14.9 | ) | (56.2 | ) | ||||||||||
|
Total
Financial Services
|
$ | 667.0 | $ | 684.8 | $ | 697.4 | $ | 778.5 | $ | 2,827.7 | ||||||||||
|
Segment Expenses
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (a)
|
$ | 212.5 | $ | 223.7 | $ | 230.1 | $ | 266.8 | $ | 933.0 | ||||||||||
|
McGraw-Hill
Financial
|
207.7 | 210.3 | 208.5 | 247.2 | 873.6 | |||||||||||||||
|
Intersegment
Elimination
|
(13.2 | ) | (13.8 | ) | (14.4 | ) | (14.9 | ) | (56.2 | ) | ||||||||||
|
Total
Financial Services
|
$ | 407.0 | $ | 420.1 | $ | 424.3 | $ | 499.1 | $ | 1,750.5 | ||||||||||
|
Operating Profit
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (a)
|
$ | 188.8 | $ | 181.4 | $ | 187.3 | $ | 204.8 | $ | 762.4 | ||||||||||
|
McGraw-Hill
Financial
|
71.2 | 83.4 | 85.8 | 74.6 | 314.9 | |||||||||||||||
|
Total
Financial Services
|
$ | 260.0 | $ | 264.7 | $ | 273.1 | $ | 279.4 | $ | 1,077.3 | ||||||||||
|
(a)
|
For
the three months ended September 30, 2010, segment expenses and operating
profit include a $7.3 million pre-tax gain on the sale of certain equity
interests at Standard & Poor's
|
|
(unaudited)
|
2009
|
|||||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's
|
$ | 342.1 | $ | 403.7 | $ | 375.7 | $ | 415.9 | $ | 1,537.3 | ||||||||||
|
McGraw-Hill
Financial
|
279.5 | 282.3 | 273.6 | 286.4 | 1,121.8 | |||||||||||||||
|
Intersegment
Revenue
|
(11.5 | ) | (12.2 | ) | (12.3 | ) | (13.1 | ) | (49.0 | ) | ||||||||||
|
Total
Financial Services
|
$ | 610.2 | $ | 673.8 | $ | 637.0 | $ | 689.2 | $ | 2,610.1 | ||||||||||
|
Segment Expenses
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (b)
|
$ | 189.4 | $ | 198.1 | $ | 201.0 | $ | 236.6 | $ | 825.2 | ||||||||||
|
McGraw-Hill
Financial (b)(c)
|
200.6 | 211.5 | 192.1 | 215.7 | 819.9 | |||||||||||||||
|
Intersegment
Elimination
|
(11.5 | ) | (12.2 | ) | (12.3 | ) | (13.1 | ) | (49.0 | ) | ||||||||||
|
Total
Financial Services
|
$ | 378.6 | $ | 397.4 | $ | 380.8 | $ | 439.2 | $ | 1,596.0 | ||||||||||
|
Operating Profit
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (b)
|
$ | 152.6 | $ | 205.6 | $ | 174.7 | $ | 179.2 | $ | 712.2 | ||||||||||
|
McGraw-Hill
Financial (b)(c)
|
78.9 | 70.8 | 81.5 | 70.7 | 301.9 | |||||||||||||||
|
Total
Financial Services
|
$ | 231.6 | $ | 276.4 | $ | 256.2 | $ | 250.0 | $ | 1,014.1 | ||||||||||
|
(b)
|
For
the three months ended June 30, 2009, segment expenses and operating
profit include a net pre-tax restructuring reversal of $(3.4) million at
Standard & Poor's and a net pre-tax restructuring charge of $3.0
million at McGraw-Hill Financial
|
|
(c)
|
For
the three months ended June 30, 2009, segment expenses and operating
profit include a $13.8 million pre-tax loss on the sale of Vista Research,
Inc.
|
Note -
Totals may not sum due to rounding
Exhibit
7
The
McGraw-Hill Companies
Recasted
Standard & Poor's and McGraw-Hill Financial Operating Results - As
Adjusted
(dollars
in millions)
|
(unaudited)
|
2010
|
|||||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's
|
$ | 401.3 | $ | 405.0 | $ | 417.5 | $ | 471.6 | $ | 1,695.4 | ||||||||||
|
McGraw-Hill
Financial
|
278.8 | 293.6 | 294.3 | 321.8 | 1,188.5 | |||||||||||||||
|
Intersegment
Revenue
|
(13.2 | ) | (13.8 | ) | (14.4 | ) | (14.9 | ) | (56.2 | ) | ||||||||||
|
Total
Financial Services
|
$ | 667.0 | $ | 684.8 | $ | 697.4 | $ | 778.5 | $ | 2,827.7 | ||||||||||
|
Segment Expenses
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (a)
|
$ | 212.5 | $ | 223.7 | $ | 237.4 | $ | 266.8 | $ | 940.3 | ||||||||||
|
McGraw-Hill
Financial
|
207.7 | 210.3 | 208.5 | 247.2 | 873.6 | |||||||||||||||
|
Intersegment
Elimination
|
(13.2 | ) | (13.8 | ) | (14.4 | ) | (14.9 | ) | (56.2 | ) | ||||||||||
|
Total
Financial Services
|
$ | 407.0 | $ | 420.1 | $ | 431.6 | $ | 499.1 | $ | 1,757.7 | ||||||||||
|
Operating Profit
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (a)
|
$ | 188.8 | $ | 181.4 | $ | 180.1 | $ | 204.8 | $ | 755.1 | ||||||||||
|
McGraw-Hill
Financial
|
71.2 | 83.4 | 85.8 | 74.6 | 314.9 | |||||||||||||||
|
Total
Financial Services
|
$ | 260.0 | $ | 264.7 | $ | 265.8 | $ | 279.4 | $ | 1,070.0 | ||||||||||
|
(a)
|
For
the three months ended September 30, 2010, segment expenses and operating
profit exclude a $7.3 million pre-tax gain on the sale of certain equity
interests at Standard & Poor's
|
|
(unaudited)
|
2009
|
|||||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's
|
$ | 342.1 | $ | 403.7 | $ | 375.7 | $ | 415.9 | $ | 1,537.3 | ||||||||||
|
McGraw-Hill
Financial
|
279.5 | 282.3 | 273.6 | 286.4 | 1,121.8 | |||||||||||||||
|
Intersegment
Revenue
|
(11.5 | ) | (12.2 | ) | (12.3 | ) | (13.1 | ) | (49.0 | ) | ||||||||||
|
Total
Financial Services
|
$ | 610.2 | $ | 673.8 | $ | 637.0 | $ | 689.2 | $ | 2,610.1 | ||||||||||
|
Segment Expenses
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (b)
|
$ | 189.4 | $ | 201.5 | $ | 201.0 | $ | 236.6 | $ | 828.6 | ||||||||||
|
McGraw-Hill
Financial (b)(c)
|
200.6 | 194.6 | 192.1 | 215.7 | 803.0 | |||||||||||||||
|
Intersegment
Elimination
|
(11.5 | ) | (12.2 | ) | (12.3 | ) | (13.1 | ) | (49.0 | ) | ||||||||||
|
Total
Financial Services
|
$ | 378.6 | $ | 383.9 | $ | 380.8 | $ | 439.2 | $ | 1,582.6 | ||||||||||
|
Operating Profit
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
Standard
& Poor's (b)
|
$ | 152.6 | $ | 202.2 | $ | 174.7 | $ | 179.2 | $ | 708.8 | ||||||||||
|
McGraw-Hill
Financial (b)(c)
|
78.9 | 87.7 | 81.5 | 70.7 | 318.7 | |||||||||||||||
|
Total
Financial Services
|
$ | 231.6 | $ | 289.9 | $ | 256.2 | $ | 250.0 | $ | 1,027.5 | ||||||||||
|
(b)
|
For
the three months ended June 30, 2009, segment expenses and operating
profit exclude a net pre-tax restructuring reversal of $(3.4) million at
Standard & Poor's and a net pre-tax restructuring charge of $3.0
million at McGraw-Hill Financial
|
|
(c)
|
For
the three months ended June 30, 2009, segment expenses and operating
profit exclude a $13.8 million pre-tax loss on the sale of Vista Research,
Inc.
|
Note -
Totals may not sum due to rounding
Exhibit
8
Recasted
- Standard & Poor's
2010 and
2009
(dollars
in millions)
Transaction
vs. Non-Transaction Revenue
|
(unaudited)
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
2010
|
||||||||||||||||||||
|
Transaction
revenue (a)
|
$ | 150.4 | $ | 148.9 | $ | 163.1 | $ | 200.0 | $ | 662.5 | ||||||||||
|
Non-transaction
revenue (b)
|
250.8 | 256.1 | 254.4 | 271.6 | 1,032.9 | |||||||||||||||
|
Total
Standard & Poor's
|
$ | 401.3 | $ | 405.0 | $ | 417.5 | $ | 471.6 | $ | 1,695.4 | ||||||||||
|
2009
|
||||||||||||||||||||
|
Transaction
revenue
|
$ | 115.9 | $ | 150.2 | $ | 129.4 | $ | 154.2 | $ | 549.8 | ||||||||||
|
Non-transaction
revenue
|
226.2 | 253.5 | 246.2 | 261.7 | 987.6 | |||||||||||||||
|
Total
Standard & Poor's
|
$ | 342.1 | $ | 403.7 | $ | 375.7 | $ | 415.9 | $ | 1,537.3 | ||||||||||
|
(a)
|
Revenue
related to ratings of publicly-issued debt, bank loan ratings and
corporate credit estimates
|
|
(b)
|
Revenue
primarily related to annual fees for frequent issuer programs and
surveillance
|
Domestic
vs. International Revenue
|
(unaudited)
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
2010
|
||||||||||||||||||||
|
Domestic
revenue
|
$ | 212.6 | $ | 224.9 | $ | 231.7 | $ | 250.1 | $ | 919.3 | ||||||||||
|
International
revenue
|
188.7 | 180.1 | 185.7 | 221.5 | 776.1 | |||||||||||||||
|
Total
Standard & Poor's
|
$ | 401.3 | $ | 405.0 | $ | 417.5 | $ | 471.6 | $ | 1,695.4 | ||||||||||
|
2009
|
||||||||||||||||||||
|
Domestic
revenue
|
$ | 184.6 | $ | 217.5 | $ | 190.5 | $ | 206.8 | $ | 799.5 | ||||||||||
|
International
revenue
|
157.4 | 186.2 | 185.1 | 209.1 | 737.8 | |||||||||||||||
|
Total
Standard & Poor's
|
$ | 342.1 | $ | 403.7 | $ | 375.7 | $ | 415.9 | $ | 1,537.3 | ||||||||||
Note -
Totals may not sum due to rounding
Exhibit
9
The
McGraw-Hill Companies
Recasted
- McGraw-Hill Financial
2010 and
2009
(dollars
in millions)
Subscription
vs. Non-Subscription Revenue
|
(unaudited)
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
2010
|
||||||||||||||||||||
|
Subscription
revenue (a)
|
$ | 206.6 | $ | 213.1 | $ | 217.8 | $ | 238.2 | $ | 875.7 | ||||||||||
|
Non-subscription
revenue (b)
|
72.2 | 80.6 | 76.5 | 83.5 | 312.8 | |||||||||||||||
|
Total
McGraw-Hill Financial
|
$ | 278.8 | $ | 293.6 | $ | 294.3 | $ | 321.8 | $ | 1,188.5 | ||||||||||
|
2009
|
||||||||||||||||||||
|
Subscription
revenue
|
$ | 205.6 | $ | 210.7 | $ | 203.1 | $ | 209.7 | $ | 829.1 | ||||||||||
|
Non-subscription
revenue
|
74.0 | 71.6 | 70.5 | 76.7 | 292.7 | |||||||||||||||
|
Total
McGraw-Hill Financial
|
$ | 279.5 | $ | 282.3 | $ | 273.6 | $ | 286.4 | $ | 1,121.8 | ||||||||||
|
(a)
|
Revenue
related to credit ratings-related information products, Capital IQ
platform, investment research products and other data
subscriptions
|
|
(b)
|
Revenue
related to fees based on assets underlying exchange-traded funds, as well
as certain advisory, pricing and analytical
services
|
Domestic
vs. International Revenue
|
(unaudited)
|
||||||||||||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
||||||||||||||||
|
2010
|
||||||||||||||||||||
|
Domestic
revenue
|
$ | 197.7 | $ | 207.3 | $ | 205.3 | $ | 218.2 | $ | 828.5 | ||||||||||
|
International
revenue
|
81.2 | 86.3 | 89.0 | 103.6 | 360.1 | |||||||||||||||
|
Total
McGraw-Hill Financial
|
$ | 278.8 | $ | 293.6 | $ | 294.3 | $ | 321.8 | $ | 1,188.5 | ||||||||||
|
2009
|
||||||||||||||||||||
|
Domestic
revenue
|
$ | 206.8 | $ | 200.5 | $ | 192.2 | $ | 198.3 | $ | 797.9 | ||||||||||
|
International
revenue
|
72.7 | 81.8 | 81.4 | 88.1 | 323.9 | |||||||||||||||
|
Total
McGraw-Hill Financial
|
$ | 279.5 | $ | 282.3 | $ | 273.6 | $ | 286.4 | $ | 1,121.8 | ||||||||||
Note -
Totals may not sum due to rounding
Exhibit
10
Non-GAAP
Financial Information
Periods
ended December 31, 2010 and 2009
(dollars
in millions)
Computation
of Free Cash Flow:
|
(unaudited)
|
Twelve Months
|
|||||||
|
2010
|
2009
|
|||||||
|
Cash
provided by operating activities
|
$ | 1,458.2 | $ | 1,329.9 | ||||
|
Investment
in prepublication costs
|
(150.8 | ) | (177.0 | ) | ||||
|
Capital
expenditures
|
(115.5 | ) | (92.3 | ) | ||||
|
Dividends
paid to shareholders
|
(292.3 | ) | (281.5 | ) | ||||
|
Dividends
paid to noncontrolling interests
|
(18.9 | ) | (9.2 | ) | ||||
|
Free
cash flow
|
$ | 880.7 | $ | 769.9 | ||||
Computation
of Net Cash:
|
(unaudited)
|
Twelve Months
|
|||||||
|
2010
|
2009
|
|||||||
|
Cash
and equivalents
|
$ | 1,525.6 | $ | 1,209.9 | ||||
|
Short-term
investments
|
22.2 | 24.6 | ||||||
|
Less:
long-term debt and notes payable
|
1,198.3 | 1,197.8 | ||||||
|
Net
cash
|
$ | 349.5 | $ | 36.7 | ||||
Computation
of Revenue Adjusted for BusinessWeek:
|
(unaudited)
|
Three Months
|
Twelve Months
|
||||||||||||||||||||||
|
2010
|
2009
|
% Change
|
2010
|
2009
|
% Change
|
|||||||||||||||||||
|
Revenue:
|
||||||||||||||||||||||||
|
Information
& Media
|
$ | 249.3 | $ | 253.3 | (1.6 | )% | $ | 907.5 | $ | 953.8 | (4.9 | )% | ||||||||||||
|
Excluding
BusinessWeek
|
- | (21.6 | ) | - | (99.2 | ) | ||||||||||||||||||
| $ | 249.3 | $ | 231.7 | 7.6 | % | $ | 907.5 | $ | 854.6 | 6.2 | % | |||||||||||||
|
Information
& Media - Business-to-Business
|
$ | 220.9 | $ | 230.0 | (4.0 | )% | $ | 811.5 | $ | 872.7 | (7.0 | )% | ||||||||||||
|
Excluding
BusinessWeek
|
- | (21.6 | ) | - | (99.2 | ) | ||||||||||||||||||
| $ | 220.9 | $ | 208.4 | 6.0 | % | $ | 811.5 | $ | 773.6 | 4.9 | % | |||||||||||||
Note -
Totals may not sum and percentages may not recalculate due to
rounding
Exhibit
11