S&P GLOBAL INC., 10-Q filed on 4/30/2013
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Apr. 19, 2013
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
MCGRAW-HILL COMPANIES INC 
 
Entity Central Index Key
0000064040 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2013 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q1 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
274.1 
Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Statement [Abstract]
 
 
Revenue
$ 1,181 
$ 1,035 
Expenses:
 
 
Operating-related expenses
374 
361 
Selling and general expenses
494 
361 
Depreciation
23 
22 
Amortization of intangibles
12 
9 
Total expenses
903 
753 
Operating profit
278 
282 
Interest expense, net
15 
21 
Income from continuing operations before taxes on income
263 
261 
Provision for taxes on income
89 
98 
Income from continuing operations
174 
163 
Loss from discontinued operations, net of tax
(31)
(36)
Gain on sale of discontinued operations, net of tax
612 
0 
Discontinued operations, net
581 
(36)
Net income
755 
127 
Less: net income from continuing operations attributable to noncontrolling interests
(21)
(5)
Less: net loss from discontinued operations attributable to noncontrolling interests
1 
1 
Net income
735 
123 
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
Income from continuing operations
153 
158 
Income (loss) from discontinued operations
582 
(35)
Net income
$ 735 
$ 123 
Basic:
 
 
Income from continuing operations (in usd per share)
$ 0.55 
$ 0.57 
Income (loss) from discontinued operations (in usd per share)
$ 2.07 
$ (0.13)
Net income (in usd per share)
$ 2.62 
$ 0.44 
Diluted:
 
 
Income from continuing operations (in usd per share)
$ 0.54 
$ 0.56 
Income (loss) from discontinued operations (in usd per share)
$ 2.05 
$ (0.13)
Net income (in usd per share)
$ 2.59 
$ 0.43 
Average number of common shares outstanding:
 
 
Basic (in shares)
280.5 
278.0 
Diluted (in shares)
284.3 
283.8 
Dividend declared per common share (in usd per share)
$ 0.28 
$ 0.255 
Consolidated Statements of Income (Unaudited) Parenthetical Disclosure (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Income Statement [Abstract]
 
Accumulated other comprehensive income reclassifications for foreign currency translation adjustment
$ (75)
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
 
 
Net income
$ 755 
$ 127 
Other comprehensive income:
 
 
Foreign currency translation adjustment
67 
19 
Income tax effect, foreign currency translation adjustment
(7)
(1)
Foreign currency translation adjustment, net of income tax effect
60 
18 
Pension and other post-retirment benefit plans
3 
8 
Income tax effect, pension and other post-retirment benefit plans
(3)
(3)
Pension and other post-retirement benefit plans, net of income tax effect
0 
5 
Unrealized loss on investments and forward exchange contracts
8 
1 
Income tax effect, unrealized loss on investments and forward exchange contracts
(4)
0 
Unrealized loss on investments and forward exchange contracts, net of income tax effect
4 
1 
Comprehensive income
819 
151 
Less: comprehensive income (loss) attributable to noncontrolling interests
(3)
(7)
Less: comprehensive income attributable to redeemable noncontrolling interests
(18)
0 
Comprehensive income attributable to The McGraw-Hill Companies, Inc.
$ 798 
$ 144 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Current assets:
 
 
Cash and equivalents
$ 1,905 
$ 760 
Accounts receivable, net of allowance for doubtful accounts: 2013 - $51 ; 2012 - $54
999 
954 
Deferred income taxes
133 
117 
Prepaid and other current assets
144 
128 
Assets held for sale
0 
1,940 
Total current assets
3,181 
3,899 
Property and equipment, net of accumulated depreciation: 2013 - $641 ; 2012 - $772
345 
368 
Goodwill
1,429 
1,438 
Other intangible assets, net
1,054 
1,081 
Other non-current assets
261 
266 
Total assets
6,270 
7,052 
Current liabilities:
 
 
Accounts payable
250 
249 
Accrued compensation and contributions to retirement plans
250 
453 
Short-term debt
0 
457 
Income taxes currently payable
346 
158 
Unearned revenue
1,279 
1,229 
Other current liabilities
563 
457 
Liabilities held for sale
0 
664 
Total current liabilities
2,688 
3,667 
Long-term debt
799 
799 
Pension and other postretirement benefits
511 
529 
Other non-current liabilities
380 
407 
Total liabilities
4,378 
5,402 
Commitments and contingencies (Note 11)
   
   
Redeemable noncontrolling interest (Note 7)
810 
810 
Equity:
 
 
Common stock
412 
412 
Additional paid-in capital
236 
492 
Retained income
7,168 
6,525 
Accumulated other comprehensive loss
(454)
(517)
Less: common stock in treasury
(6,332)
(6,145)
Total equity - controlling interests
1,030 
767 
Total equity - noncontrolling interests
52 
73 
Total equity
1,082 
840 
Total liabilities and equity
$ 6,270 
$ 7,052 
Consolidated Balance Sheets Balance Sheet Parentheticals (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
 
 
Allowance for Doubtful Accounts Receivable, Current
$ 51 
$ 54 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
$ 641 
$ 772 
Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Operating Activities:
 
 
Net income
$ 755 
$ 127 
Less: discontinued operations, net
581 
(36)
Net income from continuing operations
174 
163 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
Depreciation (including amortization of technology projects)
23 
22 
Amortization of intangibles
12 
9 
Provision for losses on accounts receivable
11 
4 
Deferred income taxes
1 
2 
Stock-based compensation
21 
17 
Other
87 
19 
Changes in operating assets and liabilities, net of effect of acquisitions:
 
 
Accounts receivable
(46)
(47)
Prepaid and other current assets
(25)
(13)
Accounts payable and accrued expenses
(242)
(189)
Unearned revenue
63 
8 
Other current liabilities
14 
(6)
Net change in prepaid/accrued income taxes
(148)
53 
Net change in other assets and liabilities
8 
(16)
Cash provided by operating activities from continuing operations
(47)
26 
Investing Activities:
 
 
Capital expenditures
(22)
(10)
Acquisitions, net of cash acquired
0 
(16)
Changes in short-term investments
0 
5 
Cash used for investing activities from continuing operations
(22)
(21)
Financing Activities:
 
 
Repayments of short-term debt
(457)
0 
Dividends paid to shareholders
(79)
(74)
Dividends paid to noncontrolling interests
(17)
0 
Repurchase of treasury shares
(500)
0 
Exercise of stock options
74 
112 
Excess tax benefits from share-based payments
8 
5 
Cash (used for) provided by financing activities from continuing operations
(971)
43 
Effect of exchange rate changes on cash from continuing operations
(23)
6 
Cash used for continuing operations
(1,063)
54 
Cash provided by operating activities
73 
(50)
Cash used for investing activities
2,159 
(43)
Cash used for financing activities
(25)
(1)
Effect of exchange rate changes on cash
1 
4 
Effect of change in cash and equivalents
0 
7 
Cash provided by discontinued operations
2,208 
(83)
Net change in cash and equivalents
1,145 
(29)
Cash and equivalents at beginning of period
760 
835 
Cash and equivalents at end of period
$ 1,905 
$ 806 
Consolidated Statements of Equity Statement (USD $)
In Millions, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Parent [Member]
Noncontrolling Interest [Member]
Balance as of December 31, 2012 at Dec. 31, 2012
$ 840 
$ 412 
$ 492 
$ 6,525 
$ (517)
$ 6,145 
$ 767 
$ 73 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Comprehensive Income1
801 
 
 
735 
63 
 
798 
3 
Dividends
(81)
 
 
(81)
 
 
(81)
   
Noncontrolling interest adjustments2
24 
 
   
   
 
 
0 
(24)
Shares repurchases
(500)
 
(152)
 
 
348 
(500)
   
Employee stock plans, net of tax benefit
57 
 
(104)
 
 
(161)
57 
 
Change in redemption value of redeemable noncontrolling interest
2 
 
 
2 
 
 
2 
 
Other
(13)
 
 
(13)
 
 
(13)
   
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest
18 
 
 
 
 
 
 
 
Balance as of March 31, 2013 at Mar. 31, 2013
$ 1,082 
$ 412 
$ 236 
$ 7,168 
$ (454)
$ 6,332 
$ 1,030 
$ 52 
Nature of Operations and Basis of Presentation
Nature of Operations and Basis of Presentation
Basis of Presentation

The McGraw-Hill Companies, Inc. (together with its consolidated subsidiaries, "McGraw-Hill," the “Company,” “we,” “us” or “our”) is a leading content and analytics provider serving the capital, commodities and commercial markets. The capital markets include asset managers, banks, exchanges, issuers and financial advisors; the commodities markets include producers, traders and intermediaries within energy, metals, and agriculture; and the commercial markets include professionals and corporate executives within automotive, construction, aerospace and defense and marketing / research information services.

Our operations consist of four reportable segments: Standard & Poor’s Ratings (“S&P Ratings”), S&P Capital IQ, S&P Dow Jones Indices ("S&P DJ Indices") and Commodities & Commercial Markets (“C&C”).
•
S&P Ratings is a provider of credit ratings, offering investors and market participants with information and independent ratings benchmarks.
•
S&P Capital IQ is a global provider of digital and traditional financial research and analytical tools, which integrate cross-asset analytics and desktop services.
•
S&P DJ Indices is a global leading index provider that maintains a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors.
•
C&C consists of business-to-business companies specializing in commercial and commodities markets that deliver their customers access to high-value information, data, analytic services and pricing benchmarks.

We completed the sale of our McGraw-Hill Education business ("MHE") on March 22, 2013 and, accordingly, the results of operations of MHE have been reclassified to reflect the business as a discontinued operation for the three months ended March 31, 2013 and 2012. The assets and liabilities of MHE have been removed from the consolidated balance sheet as of March 31, 2013 and classified as held for sale as of December 31, 2012. See Note 2 — Acquisitions and Divestitures for further discussion.

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, the financial statements included herein should be read in conjunction with the financial statements and notes included in our Form 10-K, as amended, for the year ended December 31, 2012 (our “Form 10-K”).

In the opinion of management all normal recurring adjustments considered necessary for a fair statement of the results of the interim periods have been included. The operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the full year. Certain prior-year amounts have been reclassified to conform to the current presentation.

Our critical accounting estimates are disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, valuation of long-lived assets, goodwill and other intangible assets, pension plans, incentive and stock-based compensation, income taxes, contingencies and redeemable noncontrolling interests. Since the date of our Form 10-K, there have been no material changes to our critical accounting policies and estimates.
Acquisitions and Divestitures
Acquisitions and Divestitures
Acquisitions and Divestitures

Acquisitions

During the three months ended March 31, 2013, we did not complete any acquisitions.

During the three months ended March 31, 2012, we completed the acquisition of R² Technologies (“R²”). R² provides advanced risk and scenario-based analytics to traders, portfolio and risk managers for pricing, hedging and capital management across asset classes. R² was integrated into our S&P Capital IQ segment. Including the pro forma impact on earnings, the acquisition of R² was not material to our consolidated financial statements.

Divestitures

On November 26, 2012, we entered into a definitive agreement to sell MHE to investment funds affiliated with Apollo Global Management, LLC and on March 22, 2013, we completed the sale for a purchase price of $2.4 billion in cash. We recorded an after-tax gain on the sale of $612 million, which is included in discontinued operations, net in the consolidated statement of income for the three months ended March 31, 2013. We are using a portion of the after-tax proceeds from the sale to pay down short-term debt, in part driven by the special dividend paid in 2012, to resume share repurchases and to make selective acquisitions.

In connection with the sale, we have entered into transition service agreements designed to ensure and facilitate the orderly transfer of MHE's business operations to the buyer. Under the terms of these agreements, we will provide various services to MHE for an expected period of three to twelve months from the date of the sale.

The completion of the sale also marks the completion of our Growth and Value Plan that we began in September of 2011. Costs incurred during the three months ended March 31, 2013 and 2012 have been $44 million and $33 million, respectively. All costs for the three months ended March 31, 2013 are recorded in continuing operations, whereas $29 million of the costs for the three months ended March 31, 2012 are recorded in continuing operations. Specifically, for the three months ended March 31, 2013, the costs primarily related to $21 million of professional fees and $19 million of charges associated with our outsourcing initiatives, mainly for the write-down of certain fixed assets. For the three months ended March 31, 2012, the costs primarily related to professional fees and an $8 million charge reducing our lease commitments.

Total costs incurred since the Growth and Value Plan was announced in September of 2011 have been $341 million, of which $280 million have been recorded in continuing operations and $61 million have been recorded in discontinued operations. Costs that have been recorded in continuing operations have been included in selling and general expenses in our consolidated statements of income. These are costs that have been necessary to enable separation, reduce our cost structure, accelerate growth and increase shareholder value.

The key components of income (loss) from discontinued operations for the three months ended March 31 consist of the following:
(in millions)
2013
 
2012
Revenue
$
268

 
$
295

Expenses
314

 
357

Operating loss
(46
)
 
(62
)
Interest expense (income), net
1

 
(1
)
Loss before taxes on loss
(47
)
 
(61
)
Benefit for taxes on loss
(16
)
 
(25
)
Loss from discontinued operations, net of tax
(31
)
 
(36
)
Pre-tax gain on sale from discontinued operations
920

 
—

Provision for taxes on income
308

 
—

Gain on sale of discontinued operations, net of tax
612

 
—

Discontinued operations, net
581

 
(36
)
Less: net loss attributable to noncontrolling interests
1

 
1

Income (loss) from discontinued operations attributable to The McGraw-Hill Companies, Inc. common shareholders
$
582

 
$
(35
)

The components of assets and liabilities classified as held for sale in the consolidated balance sheet consist of the following:
(in millions)
December 31, 2012
Accounts receivable, net
$
333

Property and equipment, net
122

Goodwill
469

Other intangible assets, net
156

Inventories, net
235

Prepublication costs
304

Other assets
321

Assets held for sale
$
1,940

 
 
Accounts payable and accrued expenses
$
123

Unearned revenue
192

Other liabilities
349

Liabilities held for sale
$
664



We did not complete any divestitures during the three months ended March 31, 2012.
Income Taxes
Income Taxes
Income Taxes

For the three months ended March 31, 2013 and 2012, the effective tax rate for continuing operations was 33.7% and 37.4%, respectively. The reduction in the effective tax rate from the prior-year periods was primarily due to the partnership structure of the S&P Dow Jones Indices LLC and legal settlements as discussed in Note 11 — Commitments and Contingencies.

At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings. The tax expense or benefit related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect, and are individually computed, are recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs.

As of March 31, 2013 and December 31, 2012, the total amount of federal, state and local, and foreign unrecognized tax benefits was $77 million and $74 million, respectively, exclusive of interest and penalties. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating expense, respectively. In addition to the unrecognized tax benefits, as of March 31, 2013 and December 31, 2012, we had $18 million and $14 million, respectively, of accrued interest and penalties associated with uncertain tax positions.
Debt
Debt
Debt 
(in millions)
March 31,
2013
 
December 31,
2012
5.9% Senior Notes, due 2017 1
400

 
400

6.55% Senior Notes, due 2037 2
399

 
399

Commercial paper
—

 
457

Total debt
799

 
1,256

Less: short-term debt including current maturities
—

 
457

Long-term debt
$
799

 
$
799

1 
Interest payments are due semiannually on April 15 and October 15, and, as of March 31, 2013, the unamortized debt discount is $0.4 million.
2 
Interest payments are due semiannually on May 15 and November 15, and, as of March 31, 2013, the unamortized debt discount is $1.3 million.

The fair value of our long-term debt borrowings were $0.9 billion as of March 31, 2013 and December 31, 2012 and was estimated based on Level 1 fair value measures, specifically quoted market prices.

Currently, we have the ability to borrow a total of $1.2 billion through our commercial paper program, which is supported by our $1.2 billion three-year credit agreement (our “credit facility”) that will terminate on July 30, 2013. We pay a commitment fee of 15 to 35 basis points for our credit facility, depending on our credit rating, whether or not amounts have been borrowed and currently pay a commitment fee of 25 basis points. The interest rate on borrowings under our credit facility is, at our option, calculated using rates that are primarily based on either the prevailing London Inter-Bank Offer Rate, the prime rate determined by the administrative agent or the Federal funds rate. For certain borrowings under this credit facility there is also a spread based on our credit rating added to the applicable rate.

As of March 31, 2013, there were no commercial paper borrowings outstanding. In connection with the special dividend in the amount of $2.50 per share on our common stock we utilized our commercial paper program in December of 2012 and as a result, commercial paper borrowings outstanding as of December 31, 2012 totaled $457 million with an average interest rate and term of 0.48% and 28 days.

Our credit facility contains certain covenants. The only financial covenant requires that our indebtedness to cash flow ratio, as defined in our credit facility, is not greater than 4 to 1, and this covenant has never been exceeded.
Employee Benefits
Employee Benefits
Employee Benefits

We have a number of defined benefit pension plans and defined contribution plans covering substantially all employees. Our primary pension plan is a noncontributory plan under which benefits are based on employee career employment compensation. In December 2011, our Board of Directors approved a plan amendment that froze our U.S. Employee Retirement Plan (“U.S. ERP”) effective on April 1, 2012. Our U.S. ERP is a defined benefit plan. Under the amendment, no new employees will be permitted to enter the U.S. ERP and no additional benefits for current participants for future services will be accrued.

We also have unfunded non-U.S. benefit plans and supplemental benefit plans. The supplemental benefit plans provide senior management with supplemental retirement, disability and death benefits. Certain supplemental retirement benefits are based on final monthly earnings. In addition, we sponsor voluntary 401(k) plans under which we may match employee contributions up to certain levels of compensation as well as profit-sharing plans under which we contribute a percentage of eligible employees’ compensation to the employees’ accounts.

We also provide certain medical, dental and life insurance benefits for active and retired employees and eligible dependents. The medical and dental plans are contributory, while the life insurance plan is noncontributory. We currently do not prefund any of these plans.

We recognize the funded status of our retirement and postretirement plans in the consolidated balance sheets, with a corresponding adjustment to accumulated other comprehensive income, net of taxes. The amounts in accumulated other comprehensive income represent net unrecognized actuarial losses and unrecognized prior service costs. These amounts will be subsequently recognized as net periodic pension cost pursuant to our accounting policy for amortizing such amounts.

As part of the sale of MHE to investment funds affiliated with Apollo Global Management, LLC, described further in Note 2 — Acquisitions and Divestitures, we will retain the benefit obligations and plan assets for the defined benefit plans related to MHE, however, the benefit cost for periods presented is bifurcated between continuing and discontinued operations.

The components of net periodic benefit cost for our retirement plans and postretirement plans for the three months ended March 31 are as follows: 
(in millions)
2013
 
2012
Retirement Plans
 
 
 
Service cost
$
4

 
$
19

Interest cost
22

 
23

Expected return on plan assets
(32
)
 
(31
)
Amortization of actuarial loss
6

 
8

Curtailment gain
(2
)
 
—

Net periodic benefit cost 1
$
(2
)
 
$
19

Postretirement Plans
 
 
 
Service cost
$
1

 
$
1

Interest cost
1

 
1

Curtailment gain
(9
)
 
—

Net periodic benefit cost 2
$
(7
)
 
$
2


1 The decrease reflects the reduction in service cost resulting from a freeze of our U.S. ERP in 2012 as discussed above as well as a curtailment gain due to a freeze of pension accruals for MHE employees in the United Kingdom ("U.K.") retirement plan during 2012.
2 The decrease reflects a curtailment gain related to the sale of MHE on March 22, 2013, which was recorded within discontinued operations in our consolidated statement of income.

For the three months ended March 31, 2013 and 2012, our U.K. retirement plan accounted for a benefit of $2 million and a charge of $1 million, respectively, of the net periodic benefit cost attributable to the funded plans. The decrease in net periodic benefit cost for our U.K. retirement plan is due to the curtailment gain discussed above.

As discussed in our Form 10-K, we changed certain discount rate assumptions on our retirement and postretirement plans and our expected return on assets assumption for our retirement plans, which became effective on January 1, 2013. The effect of the assumption changes on retirement and post-retirement expense for the three months ended March 31, 2013 did not have a material impact to our financial position, results of operations or cash flows.

In the first quarter of 2013, we contributed $8 million to our retirement plans and expect to make additional required contributions of approximately $20 million to our retirement plans during the remainder of the year. We may elect to make additional non-required contributions depending on investment performance and the pension plan status in the remaining nine months of 2013.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation

We issue stock-based incentive awards to our eligible employees and Directors under the 2002 Employee Stock Incentive Plan and a Director Deferred Stock Ownership Plan. No further awards may be granted under the 1993 Employee Stock Incentive Plan and any remaining outstanding options under the 1993 Employee Stock Incentive Plan expired in the first quarter of 2013. The 2002 Employee Stock Incentive Plan permits the granting of nonqualified stock options, stock appreciation rights, performance stock, restricted stock and other stock-based awards.

Stock-based compensation for the three months ended March 31 is as follows:
(in millions)
2013
 
2012
Stock option expense
$
2

 
$
5

Restricted stock and unit awards expense
19

 
12

Total stock-based compensation expense
$
21

 
$
17



As of March 31, 2013 and December 31, 2012, we issued 2.1 million and 8.4 million common shares, respectively, upon exercise of certain stock options outstanding.
Equity
Equity
Equity

Stock Repurchases

In 2011, the Board of Directors approved a stock repurchase program authorizing the purchase of up to 50.0 million shares (the “2011 Repurchase Program”), which was approximately 17% of the total shares of our outstanding common stock at that time. Share repurchases for the three months ended March 31 were as follows: 
(in millions, except average price)
2013
 
2012
Total number of shares purchased 1
7.2

 
0.8

Average price paid per share
$
—

 
$
—

Total cash utilized
$
500

 
$
—

1 
2013 and 2012 include shares received as part of our accelerated share repurchase agreements described in more detail below.

Our purchased shares may be used for general corporate purposes, including the issuance of shares for stock compensation plans and to offset the dilutive effect of the exercise of employee stock options. As of March 31, 2013, 9.7 million shares remained available under the 2011 Repurchase Program. The 2011 Repurchase Program has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions.

Accelerated Share Repurchase Program

We entered into an accelerated share repurchase (“ASR”) agreement with a financial institution on March 25, 2013 to initiate share repurchases aggregating $500 million. The ASR agreement was structured as a capped ASR agreement in which we paid $500 million and received an initial delivery of approximately 7.2 million shares during the three months ended March 31, 2013, with an additional 1.4 million shares received on April 1, 2013, in the aggregate, representing the minimum number of shares of our common stock to be repurchased based on a calculation using a specific capped price per share. The total number of shares that will ultimately be purchased is determined based on the volume weighted-average share price (“VWAP”), minus a discount, of our common stock over a specified period of time. This price is capped such that only under limited circumstances will we be required to deliver shares or, at our election, pay cash at settlement. Additionally, depending on the average share price through the July 2013 completion date, we may receive additional shares under the ASR agreement.
In December of 2011 we entered into two separate ASR agreements with a financial institution to initiate share repurchases aggregating $500 million. The first ASR agreement was structured as an uncollared ASR agreement for the repurchase of $250 million of shares at a per share price equal to the VWAP of our common stock between December 7, 2011 and February 22, 2012. We purchased and received approximately 5 million and 0.8 million shares in December 2011 and February 2012, respectively, under the agreement. The second agreement was structured as a capped agreement for the repurchase of $250 million of shares where we purchased and received 5 million and 0.1 million shares in December 2011 and April 2012, respectively.
Redeemable Noncontrolling Interests

The agreement with the minority partners of our S&P Dow Jones Indices LLC established in June of 2012 contains redemption features whereby interests held by minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. Specifically, under the terms of the operating agreement of S&P/DJ Indices, after December 31, 2017, CME Group, Inc. (“CME Group”) and CME Group Index Services LLC (“CGIS”) will have the right at any time to sell, and we are obligated to buy, at least 20% of their share in S&P Dow Jones Indices LLC. In addition, in the event there is a change of control of the Company, for the 15 days following a change in control, CME Group and CGIS will have the right to put their interest to us at the then fair value of CME Group's and CGIS' minority interest.

If interests were to be redeemed under this agreement, we would generally be required to purchase the interest at fair value on the date of redemption. This interest is presented on the consolidated balance sheets outside of equity under the caption “Redeemable noncontrolling interest” with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to our S&P Index business. We adjust the redeemable noncontrolling interest each reporting period to its estimated redemption value, but never less than its initial fair value, considering a combination of an income and market valuation approach. Our income and market valuation approaches may incorporate Level 3 fair value measures for instances when observable inputs are not available, including assumptions related to expected future net cash flows, long-term growth rates, the timing and nature of tax attributes, and the redemption features. Any adjustments to the redemption value will impact retained income.

Noncontrolling interests that do not contain such redemption features are presented in equity.

Changes to redeemable noncontrolling interest during the three months ended March 31, 2013 were as follows:
(in millions)
 
Opening redeemable noncontrolling interest
$
810

Net income attributable to noncontrolling interest
18

Distributions to noncontrolling interest
(16
)
Redemption value adjustment
(2
)
Ending redeemable noncontrolling interest
$
810

Earnings Per Share
Earnings Per Share
Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares is increased to include additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Potential common shares consist primarily of stock options, restricted stock and restricted stock units calculated using the treasury stock method. The calculation for basic and diluted EPS for the three months ended March 31 is as follows: 
(in millions, except per share amounts)
2013
 
2012
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
Income from continuing operations
$
153

 
$
158

Income (loss) from discontinued operations
582

 
(35
)
Net income attributable to the Company
$
735

 
$
123

 
 
 
 
Basic weighted-average number of common shares outstanding
280.5

 
278.0

Effect of stock options and other dilutive securities
3.8

 
5.8

Diluted weighted-average number of common shares outstanding
284.3

 
283.8

 
 
 
 
Basic EPS:
 
 
 
Income from continuing operations
$
0.55

 
$
0.57

Income (loss) from discontinued operations
2.07

 
(0.13
)
Net income
$
2.62

 
$
0.44

Diluted EPS:
 
 
 
Income from continuing operations
$
0.54

 
$
0.56

Income (loss) from discontinued operations
2.05

 
(0.13
)
Net income
$
2.59

 
$
0.43



Restricted performance shares outstanding of 1.4 million and 1.6 million as of March 31, 2013 and 2012, respectively, were not included in the computation of diluted EPS because the necessary vesting conditions had not been met.

The effect of the potential exercise of stock options is excluded from the computation of diluted EPS when the average market price of our common stock is lower than the exercise price of the related option during the period because the effect would have been antidilutive. For the three months ended March 31, 2013 and 2012, the number of stock options excluded from the computation was 3.0 million and 4.2 million.
Restructuring
Restructuring
Restructuring

As part of our Growth and Value Plan that we began in September of 2011, we have initiated various restructuring plans as we identified opportunities for cost savings through workforce reductions and created a flatter and more agile organization. The plans that are currently active with a remaining liability are further described below. The charges for each restructuring plan are classified as selling and general expenses within the consolidated statements of income and the reserves are included in other current liabilities in the consolidated balance sheets.

In certain circumstances, reserves are no longer needed because of efficiencies in carrying out the plans or because employees previously identified for separation resigned from the Company and did not receive severance or were reassigned due to circumstances not foreseen when the original plans were initiated. In these cases, we reverse reserves through the consolidated statements of income when it is determined they are no longer needed.

As part of the definitive agreement to sell MHE to investment funds affiliated with Apollo Global Management, LLC, described further in Note 2 — Acquisitions and Divestitures, we have retained MHE's restructuring liabilities. Therefore, the remaining reserves described below include MHE's restructuring liability, however, the charge associated with the reserve has been bifurcated between continuing and discontinued operations.

During 2012 we recorded a pre-tax restructuring charge of $68 million, consisting primarily of employee severance costs related to a company-wide workforce reduction of approximately 670 positions. This charge consisted of $15 million for S&P Ratings, $19 million for S&P Capital IQ, $1 million for S&P DJ Indices, $12 million for C&C and $21 million for our corporate headquarters. The total reserve, including MHE, was $107 million. For the three months ended March 31, 2013, we have reduced the reserve by $24 million, primarily relating to cash payments for employee severance costs. The remaining reserve as of March 31, 2013 is $68 million and consists of $13 million for S&P Ratings, $11 million for S&P Capital IQ, $1 million for S&P DJ Indices, $6 million for C&C, $14 million for our corporate headquarters and $23 million for MHE.

During the fourth quarter of 2011 we recorded a pre-tax restructuring charge of $32 million, consisting primarily of facility exit costs and employee severance costs related to a company-wide workforce reduction of approximately 250 positions. This charge consisted of $9 million for S&P Ratings, $6 million for C&C and $17 million for our corporate headquarters. The total reserve, including MHE, was $66 million. In the second quarter of 2012 we recorded an additional pre-tax restructuring charge of $5 million primarily for employee severance costs as part of the Growth and Value Plan. For the three months ended March 31, 2013 and 2012, we have reduced the reserve by $5 million and $18 million, respectively, primarily relating to cash payments for employee severance costs. The remaining reserve as of March 31, 2013 is $15 million, primarily relating to MHE and our corporate headquarters.
Segment and Related Information
Segment and Related Information
Segment and Related Information

We have four reportable segments: S&P Ratings, S&P Capital IQ, S&P DJ Indices and C&C. The Executive Committee, consisting of our principal corporate executives, is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit. Segment operating profit does not include unallocated expense or interest expense, which are centrally managed costs. A summary of operating results by segment for the three months ended March 31 is as follows: 
(in millions)
2013
 
2012
 
Revenue
 
Operating Profit
 
Revenue
 
Operating Profit
S&P Ratings
$
561

 
$
259

 
$
466

 
$
186

S&P Capital IQ
288

 
56

 
274

 
62

S&P DJ Indices
115

 
67

 
79

 
45

C&C
236

 
62

 
233

 
64

Intersegment elimination 1
(19
)
 
—

 
(17
)
 
—

Total operating segments
1,181

 
444

 
1,035

 
357

Unallocated expense 2
—

 
(166
)
 
—

 
(75
)
Total
$
1,181

 
$
278

 
$
1,035

 
$
282

1 
Revenue for S&P Ratings and expenses for S&P Capital IQ include an intersegment royalty charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings.
2 
Includes Growth and Value Plan costs of $44 million and $29 million for the three months ended March 31, 2013 and 2012, respectively. Also includes pre-tax legal settlements of approximately $77 million for the three months ended March 31, 2013.

See Note 2 — Acquisitions and Divestitures and Note 9 — Restructuring for additional actions that impacted the segment operating results.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Rental Expense and Lease Obligations

As of March 31, 2013, the remaining deferred gain related to our sale-leaseback transaction with Rock-McGraw, Inc. was $119 million, as $4 million was amortized during the three months ended March 31, 2013. Interest expense associated with this operating lease for the three months ended March 31, 2013 was $1 million.

Related Party Agreements

In June of 2012 we entered into a new license agreement (the "License Agreement") with the holder of S&P Dow Jones Indices LLC noncontrolling interest, CME Group, which replaced the 2005 license agreement between S&P DJ Indices and CME Group. Under the terms of the License Agreement, S&P Dow Jones Indices LLC receives a share of the profits from the trading and clearing of CME Group's equity index products. During the three months ended March 31, 2013, S&P Dow Jones Indices LLC earned $11 million of revenue under the terms of the License Agreement. The entire amount of this revenue is included in our consolidated statement of income, and the portion related to the 27% noncontrolling interest is removed in the net income attributable to noncontrolling interests.

Legal Matters

The following amends the disclosure in Note 13 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K.
•
In connection with the Reese v. Bahash litigation, on March 28, 2013, the plaintiff filed a motion seeking to be relieved from the judgment dismissing the case and for leave to file an amended complaint. We intend to oppose the motion.
•
In connection with the DOJ lawsuit, the Company and S&P filed a motion to dismiss the complaint on April 22, 2013.
•
In connection with the related state lawsuits, numerous state-court actions have been brought against the Company and S&P by the attorneys general of various states and the District of Columbia. The Company and S&P have removed most of the actions to federal court and filed a motion before the United States Judicial Panel on Multidistrict Litigation ("JPML") to consolidate and transfer those removed actions to one federal court for all pretrial proceedings. The Company and S&P have moved to stay the removed actions pending the JPML's decision on that motion.

We believe that the claims asserted and/or contemplated in the proceedings described in Note 13 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K, as amended above, have no basis and they will be vigorously defended by the Company and/or the subsidiaries involved.

In view of the inherent difficulty of predicting the outcome of legal matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories, involve a large number of parties or are in early stages of discovery, we cannot state with confidence what the eventual outcome of the pending matters described in Note 13 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss, fines, penalties or impact related to each pending matter may be. We believe, based on our current knowledge, the outcome of the legal actions, proceedings and investigations currently pending should not have a material, adverse effect to our financial position, results of operations or cash flows.

Additionally, in April 2013 we settled certain subprime litigation cases. Included in selling and general expenses in our consolidated statements of income is a pre-tax amount of approximately $77 million for these settlements. These cases were dismissed under the terms of the settlements.
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards

In March 2013, the Financial Accounting Standards Board (“FASB”) issued amended guidance that resolves the diversity in practice for the accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity. The amended guidance requires that when a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity, the parent is required to release any related cumulative translation adjustment into net income in instances when a sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, the amended guidance clarifies that the sale of an investment in a foreign entity includes both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. In these instances, an entity is required to release the cumulative translation adjustment into net income. We will adopt the FASB's amended guidance during the three months ended March 31, 2014. We do not expect the adoption of the guidance to have a significant impact on our financial position, results of operations or cash flows.

In February 2013, the FASB issued amended guidance expanding the disclosure requirements for amounts reclassified out of accumulated other comprehensive income. The amendments require an entity to present, either on the face of the statement where net income is presented or in the notes to its financial statements, details of significant items reclassified in their entirety out of accumulated other comprehensive income and identification of the respective line items effecting net income for instances when reclassification is required under U.S. GAAP. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity will be required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by type. The amendments were effective on January 1, 2013 and have been incorporated into this quarterly report on Form 10-Q. Adoption of this guidance did not have a significant impact on our financial position, results of operations or cash flows.
Acquisitions and Divestitures (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures
The key components of income (loss) from discontinued operations for the three months ended March 31 consist of the following:
(in millions)
2013
 
2012
Revenue
$
268

 
$
295

Expenses
314

 
357

Operating loss
(46
)
 
(62
)
Interest expense (income), net
1

 
(1
)
Loss before taxes on loss
(47
)
 
(61
)
Benefit for taxes on loss
(16
)
 
(25
)
Loss from discontinued operations, net of tax
(31
)
 
(36
)
Pre-tax gain on sale from discontinued operations
920

 
—

Provision for taxes on income
308

 
—

Gain on sale of discontinued operations, net of tax
612

 
—

Discontinued operations, net
581

 
(36
)
Less: net loss attributable to noncontrolling interests
1

 
1

Income (loss) from discontinued operations attributable to The McGraw-Hill Companies, Inc. common shareholders
$
582

 
$
(35
)

The components of assets and liabilities classified as held for sale in the consolidated balance sheet consist of the following:
(in millions)
December 31, 2012
Accounts receivable, net
$
333

Property and equipment, net
122

Goodwill
469

Other intangible assets, net
156

Inventories, net
235

Prepublication costs
304

Other assets
321

Assets held for sale
$
1,940

 
 
Accounts payable and accrued expenses
$
123

Unearned revenue
192

Other liabilities
349

Liabilities held for sale
$
664

Debt (Tables)
Short-term and long-term debt outstanding
(in millions)
March 31,
2013
 
December 31,
2012
5.9% Senior Notes, due 2017 1
400

 
400

6.55% Senior Notes, due 2037 2
399

 
399

Commercial paper
—

 
457

Total debt
799

 
1,256

Less: short-term debt including current maturities
—

 
457

Long-term debt
$
799

 
$
799

1 
Interest payments are due semiannually on April 15 and October 15, and, as of March 31, 2013, the unamortized debt discount is $0.4 million.
2 
Interest payments are due semiannually on May 15 and November 15, and, as of March 31, 2013, the unamortized debt discount is $1.3 million.
Employee Benefits (Tables)
Components of net periodic cost for defined benefit plans and post-retirement healthcare and other benefits plan
The components of net periodic benefit cost for our retirement plans and postretirement plans for the three months ended March 31 are as follows: 
(in millions)
2013
 
2012
Retirement Plans
 
 
 
Service cost
$
4

 
$
19

Interest cost
22

 
23

Expected return on plan assets
(32
)
 
(31
)
Amortization of actuarial loss
6

 
8

Curtailment gain
(2
)
 
—

Net periodic benefit cost 1
$
(2
)
 
$
19

Postretirement Plans
 
 
 
Service cost
$
1

 
$
1

Interest cost
1

 
1

Curtailment gain
(9
)
 
—

Net periodic benefit cost 2
$
(7
)
 
$
2


1 The decrease reflects the reduction in service cost resulting from a freeze of our U.S. ERP in 2012 as discussed above as well as a curtailment gain due to a freeze of pension accruals for MHE employees in the United Kingdom ("U.K.") retirement plan during 2012.
2 The decrease reflects a curtailment gain related to the sale of MHE on March 22, 2013, which was recorded within discontinued operations in our consolidated statement of income.
Stock-Based Compensation (Tables)
Stock-Based Compensation
Stock-based compensation for the three months ended March 31 is as follows:
(in millions)
2013
 
2012
Stock option expense
$
2

 
$
5

Restricted stock and unit awards expense
19

 
12

Total stock-based compensation expense
$
21

 
$
17

Equity (Tables)
Share repurchases 
Share repurchases for the three months ended March 31 were as follows: 
(in millions, except average price)
2013
 
2012
Total number of shares purchased 1
7.2

 
0.8

Average price paid per share
$
—

 
$
—

Total cash utilized
$
500

 
$
—

1 
2013 and 2012 include shares received as part of our accelerated share repurchase agreements described in more detail below.

Redeemable Noncontrolling Interest 
Changes to redeemable noncontrolling interest during the three months ended March 31, 2013 were as follows:
(in millions)
 
Opening redeemable noncontrolling interest
$
810

Net income attributable to noncontrolling interest
18

Distributions to noncontrolling interest
(16
)
Redemption value adjustment
(2
)
Ending redeemable noncontrolling interest
$
810

Earnings Per Share (Tables)
Reconciliation of the number of shares used for calculating basic and diluted earnings per common share
The calculation for basic and diluted EPS for the three months ended March 31 is as follows: 
(in millions, except per share amounts)
2013
 
2012
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
Income from continuing operations
$
153

 
$
158

Income (loss) from discontinued operations
582

 
(35
)
Net income attributable to the Company
$
735

 
$
123

 
 
 
 
Basic weighted-average number of common shares outstanding
280.5

 
278.0

Effect of stock options and other dilutive securities
3.8

 
5.8

Diluted weighted-average number of common shares outstanding
284.3

 
283.8

 
 
 
 
Basic EPS:
 
 
 
Income from continuing operations
$
0.55

 
$
0.57

Income (loss) from discontinued operations
2.07

 
(0.13
)
Net income
$
2.62

 
$
0.44

Diluted EPS:
 
 
 
Income from continuing operations
$
0.54

 
$
0.56

Income (loss) from discontinued operations
2.05

 
(0.13
)
Net income
$
2.59

 
$
0.43

Segment and Related Information (Tables)
Segment information
A summary of operating results by segment for the three months ended March 31 is as follows: 
(in millions)
2013
 
2012
 
Revenue
 
Operating Profit
 
Revenue
 
Operating Profit
S&P Ratings
$
561

 
$
259

 
$
466

 
$
186

S&P Capital IQ
288

 
56

 
274

 
62

S&P DJ Indices
115

 
67

 
79

 
45

C&C
236

 
62

 
233

 
64

Intersegment elimination 1
(19
)
 
—

 
(17
)
 
—

Total operating segments
1,181

 
444

 
1,035

 
357

Unallocated expense 2
—

 
(166
)
 
—

 
(75
)
Total
$
1,181

 
$
278

 
$
1,035

 
$
282

1 
Revenue for S&P Ratings and expenses for S&P Capital IQ include an intersegment royalty charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings.
2 
Includes Growth and Value Plan costs of $44 million and $29 million for the three months ended March 31, 2013 and 2012, respectively. Also includes pre-tax legal settlements of approximately $77 million for the three months ended March 31, 2013.

Nature of Operations and Basis of Presentation Nature of Operations and Basis of Presentation (Details)
3 Months Ended
Mar. 31, 2013
Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of Reportable Segments
4 
Acquisitions and Divestitures (Divestitures) (Details Textual) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 22, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Disposal Group, Including Discontinued Operation, Sale Price
 
 
$ 2,400,000,000 
Gain on sale of discontinued operations, net of tax
612,000,000 
0 
 
Growth and value plan, cost incurred to date
341,000,000 
 
 
Segment, Continuing Operations [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Growth and value plan, cost incurred to date
280,000,000 
 
 
Segment, Discontinued Operations [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Growth and value plan, cost incurred to date
61,000,000 
 
 
Unallocated Amount to Segment [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
44,000,000 
33,000,000 
 
Unallocated Amount to Segment [Member] |
Segment, Continuing Operations [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
 
29,000,000 
 
Unallocated Amount to Segment [Member] |
Spin Off Preparation [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
 
29,000,000 
 
Unallocated Amount to Segment [Member] |
Professional Fees [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
21,000,000 
 
 
Unallocated Amount to Segment [Member] |
Outsourcing Initiatives [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
19,000,000 
 
 
Unallocated Amount to Segment [Member] |
Lease Commitment Charges [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Restructuring Charges
 
$ 8,000,000 
 
Acquisitions and Divestitures (Divestitures) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Income Statement reclassified results of discontinued operations
 
 
 
Revenue
$ 268 
$ 295 
 
Expenses
314 
357 
 
Operating loss
(46)
(62)
 
Interest expense (income), net
1 
(1)
 
Loss before taxes on loss
(47)
(61)
 
Benefit for taxes on loss
16 
25 
 
Loss from discontinued operations, net of tax
(31)
(36)
 
Pre-tax gain on sale from discontinued operations
920 
0 
 
Provision for taxes on income
308 
0 
 
Gain on sale of discontinued operations, net of tax
612 
0 
 
Discontinued operations, net
581 
(36)
 
Less: net loss attributable to noncontrolling interests
1 
1 
 
Income (loss) from discontinued operations attributable to The McGraw-Hill Companies, Inc. common shareholders
582 
(35)
 
Assets and liabilities reclassified as held for sale
 
 
 
Accounts receivable, net
 
 
333 
Property and equipment, net
 
 
122 
Goodwill
 
 
469 
Other intangible assets, net
 
 
156 
Inventories, net
 
 
235 
Prepublication costs
 
 
304 
Other assets
 
 
321 
Assets held for sale
 
 
1,940 
Accounts payable and accrued expenses
 
 
123 
Unearned revenue
 
 
192 
Other liabilities
 
 
349 
Liabilities held for sale
 
 
$ 664 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Income Taxes (Textual) [Abstract]
 
 
 
Effective tax rate
33.70% 
37.40% 
 
Unrecognized tax benefits interest on income taxes expense
$ 77 
 
$ 74 
Accrued interest and penalty related to unrecognized tax benefits included in income tax provision
$ 18 
 
$ 14 
Debt (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Debt Instrument [Line Items]
 
 
Total debt
$ 799 
$ 1,256 
Less: short-term debt including current maturities
0 
457 
Long-term debt
799 
799 
Debt (Textual) [Abstract]
 
 
Long-term Debt, Fair Value
900.0 
900.0 
5.9% Senior Notes, due 2017 [Member]
 
 
Debt Instrument [Line Items]
 
 
Total debt
400 1
400 1
Debt (Textual) [Abstract]
 
 
Interest rate
5.90% 
5.90% 
Unamortized debt discount on senior notes
0.4 
 
6.55% Senior Notes, due 2037 [Member]
 
 
Debt Instrument [Line Items]
 
 
Total debt
399 2
399 2
Debt (Textual) [Abstract]
 
 
Interest rate
6.55% 
6.55% 
Unamortized debt discount on senior notes
1.3 
 
Notes Payable [Member]
 
 
Debt Instrument [Line Items]
 
 
Total debt
$ 0 
$ 457 
(Commercial Paper Program) (Details) (USD $)
1 Months Ended 3 Months Ended
Dec. 31, 2012
Mar. 31, 2013
Mar. 31, 2012
Line of Credit Facility [Line Items]
 
 
 
Size of total commercial paper program
 
$ 1,200,000,000 
 
Commitment fee, minimum percentage to pay depending on credit rating
 
0.15% 
 
Commitment fee, maximum percentage to pay depending on credit rating
 
0.35% 
 
Commitment fee
 
0.25% 
 
Commitment fee discription
 
15 to 35 basis points, depending on credit rating and currently pay a commitment fee of 25 basis points 
 
Dividend declared per common share (in usd per share)
$ 2.50 
$ 0.28 
$ 0.255 
Line of credit amount outstanding
457,000,000 
 
 
Line of credit, interest rate
0.48% 
 
 
Line of credit, term at period end
28 days 
 
 
Long-term Debt, Fair Value
900,000,000 
900,000,000 
 
3 Year Facility [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Size of total commercial paper program
 
$ 1,200,000,000 
 
Maximum [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Indebtedness to cash flow
 
4 
 
Employee Benefits (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Sep. 30, 2011
Retirement Plans [Member]
 
 
Components of net periodic cost for retirement plans and post-retirement plans
 
 
Service cost
$ 4 
$ 19 
Interest cost
22 
23 
Expected return on plan assets
(32)
(31)
Amortization of actuarial loss
6 
8 
Curtailment gain
(2)
0 
Net periodic benefit cost
(2)1
19 1
Post-Retirement Plans [Member]
 
 
Components of net periodic cost for retirement plans and post-retirement plans
 
 
Service cost
1 
1 
Interest cost
1 
1 
Curtailment gain
(9)
0 
Net periodic benefit cost
$ (7)2
$ 2 2
Employee Benefits (Details Textual) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Employee Benefits (Textual) [Abstract]
 
 
Contribution towards retirement plans
$ 8 
 
Expected contributions towards of retirement plans
20 
 
United Kingdom Retirement Plan [Member]
 
 
Employee Benefits (Textual) [Abstract]
 
 
Net periodic benefit cost
$ 2 
$ 1 
Stock-Based Compensation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Stock-Based Compensation
 
 
Stock option expense
$ 2 
$ 5 
Restricted stock and unit awards expense
19 
12 
Total stock-based compensation expense
$ 21 
$ 17 
Stock-Based Compensation (Details Textual)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2011
Stock Based Compensation (Textual) [Abstract]
 
 
Common shares issued from exercise of stock option outstanding
2.1 
8.4 
Equity (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Sep. 30, 2011
Share repurchases
 
 
Average price paid per share
$ 0.00 
$ 0.00 
Total cash utilized
$ 500 
$ 0 
2011 Repurchase Program [Member]
 
 
Share repurchases
 
 
Total number of shares purchased
7.2 1
0.8 1
Equity (Details Textual) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 0 Months Ended
Mar. 25, 2013
Mar. 31, 2013
Dec. 31, 2011
Mar. 31, 2013
2011 Repurchase Program [Member]
Mar. 31, 2013
First ASR Agreement [Member]
Mar. 31, 2013
Second ASR Agreement [Member]
Feb. 28, 2012
Uncollared ASR Agreement [Member]
Dec. 31, 2011
Uncollared ASR Agreement [Member]
Mar. 31, 2013
Uncollared ASR Agreement [Member]
Apr. 30, 2012
Capped ASR Agreement [Member]
Dec. 31, 2011
Capped ASR Agreement [Member]
Apr. 2, 2013
Subsequent Event [Member]
Equity (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Stock repurchase program number of shares authorized to be repurchased
 
 
 
50.0 
 
 
 
 
 
 
 
 
Maximum number of shares authorized for repurchase under stock repurchase plan as percentage of outstanding common stock
 
 
 
17.00% 
 
 
 
 
 
 
 
 
Remaining shares available under repurchase program
 
 
 
9.7 
 
 
 
 
 
 
 
 
Repurchase of additional shares
$ 500 
 
$ 500 
 
 
 
 
 
 
 
 
 
Repurchase of shares at a per share price
 
 
 
 
$ 250 
$ 250 
 
 
 
 
 
 
Shares received on initial delivery
 
 
 
 
 
 
 
5.0 
7.2 
 
5.0 
 
Additional shares received
 
 
 
 
 
 
0.8 
 
 
0.1 
 
1.4 
Interest In Joint Venture Minimum Percentage
 
20.00% 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Agreement Terms, Change of Control, Put Option for Minority Interest Ownership, Effective Period
 
15 days 
 
 
 
 
 
 
 
 
 
 
Equity (Details 2) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Jun. 30, 2012
Stockholders' Equity Attributable to Redeemable Noncontrolling Interest [Roll Forward]
 
 
Redeemable Noncontrolling Interest, Equity, Carrying Amount
$ 810 
$ 810 
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest
18 
 
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders
16 
 
Noncontrolling Interest, Change in Redemption Value
(2)
 
Redeemable Noncontrolling Interest, Equity, Carrying Amount
$ 810 
$ 810 
Earnings Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Amount attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
Income from continuing operations
$ 153 
$ 158 
Income (loss) from discontinued operations
582 
(35)
Net income
$ 735 
$ 123 
Basic weighted-average number of common shares outstanding
280.5 
278.0 
Effect of stock options and other dilutive securities
3.8 
5.8 
Diluted weighted-average number of common shares outstanding
284.3 
283.8 
Basic EPS:
 
 
Income from continuing operations (in usd per share)
$ 0.55 
$ 0.57 
Loss from discontinued operations, net of tax (in usd per share)
$ 2.07 
$ (0.13)
Net income (in usd per share)
$ 2.62 
$ 0.44 
Diluted EPS:
 
 
Income from continuing operations (in usd per share)
$ 0.54 
$ 0.56 
Loss from discontinued operations, net of tax (in usd per share)
$ 2.05 
$ (0.13)
Net income (in usd per share)
$ 2.59 
$ 0.43 
Restricted Stock [Member]
 
 
Common Shares Outstanding (Textual) [Abstract]
 
 
Outstanding shares not included in the computation of diluted earnings per share for both restricted stock and stock options
1.4 
1.6 
Stock Options [Member]
 
 
Common Shares Outstanding (Textual) [Abstract]
 
 
Outstanding shares not included in the computation of diluted earnings per share for both restricted stock and stock options
3.0 
4.2 
Restructuring (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2013
Restructuring Plan, 2012 [Member]
Positions
Dec. 31, 2012
Restructuring Plan, 2012 [Member]
Dec. 31, 2011
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
Restructuring Plan, 2011 [Member]
Mar. 31, 2012
Restructuring Plan, 2011 [Member]
Dec. 31, 2011
Restructuring Plan, 2011 [Member]
Positions
Mar. 31, 2013
Growth And Value Plan [Member]
Mar. 31, 2013
MHE [Member]
Restructuring Plan, 2012 [Member]
Dec. 31, 2011
MHE [Member]
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
S&P Ratings [Member]
Restructuring Plan, 2012 [Member]
Dec. 31, 2011
S&P Ratings [Member]
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
S&P Capital IQ / Indices [Member]
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
S&P/DJ Indices [Member]
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
C&C [Member]
Restructuring Plan, 2012 [Member]
Mar. 31, 2013
Corporate Segment [Member]
Restructuring Plan, 2012 [Member]
Dec. 31, 2011
Corporate Segment [Member]
Restructuring Plan, 2012 [Member]
Restructuring (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax restructuring charge
$ 68 
 
 
 
 
$ 32 
$ 5 
$ 12 
$ 6 
$ 15 
$ 9 
$ 19 
 
$ 1 
$ 21 
$ 17 
Restructuring reserve
 
107 
66 
 
 
 
 
 
 
 
 
 
 
 
 
 
Workforce reduction, positions
670 
 
 
 
 
250 
 
 
 
 
 
 
 
 
 
 
Restructuring charges paid
24 
 
 
5 
18 
 
 
 
 
 
 
 
 
 
 
 
Restructuring reserve, current
$ 68 
 
 
$ 15 
 
 
 
$ 23 
 
$ 13 
 
$ 11 
$ 1 
$ 6 
$ 14 
 
Segment and Related Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Sep. 30, 2011
Segment information
 
 
 
Revenue
$ 1,181 
$ 1,035 
$ 1,035 
Operating Income (Loss)
278 
282 
282 
S&P Ratings [Member]
 
 
 
Segment information
 
 
 
Revenue
561 
 
466 
Operating Income (Loss)
259 
 
186 
S&P Capital IQ/S&P Indices [Member]
 
 
 
Segment information
 
 
 
Revenue
288 
 
274 
Operating Income (Loss)
56 
 
62 
Commodities & Commercial [Member]
 
 
 
Segment information
 
 
 
Revenue
115 
 
79 
Operating Income (Loss)
67 
 
45 
McGraw-Hill Education [Member]
 
 
 
Segment information
 
 
 
Revenue
236 
 
233 
Operating Income (Loss)
62 
 
64 
Intersegment elimination [Member]
 
 
 
Segment information
 
 
 
Revenue
(19)1
 
(17)1
Operating Income (Loss)
0 1
 
0 1
Operating Segments [Member]
 
 
 
Segment information
 
 
 
Revenue
1,181 
 
1,035 
Operating Income (Loss)
444 
 
357 
General corporate expense [Member]
 
 
 
Segment information
 
 
 
Revenue
0 2
 
0 2
Operating Income (Loss)
(166)2
 
(75)2
Restructuring Charges
44 
33 
 
Spin Off Preparation [Member] |
General corporate expense [Member]
 
 
 
Segment information
 
 
 
Restructuring Charges
 
29 
 
Pretax Legal Settlement [Member] |
General corporate expense [Member]
 
 
 
Segment information
 
 
 
Restructuring Charges
$ 77 
 
 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2013
S&P/DJ Indices [Member]
CME Group [Member]
Apr. 30, 2013
Subsequent Event [Member]
Commitments and Contingencies (Textual) [Abstract]
 
 
 
Deferred gain
$ 119 
 
 
Amortized Deferred Gain
4 
 
 
Interest expense
1 
 
 
Related Party Transaction [Line Items]
 
 
 
Revenues earned under License Agreement with CME Group
 
11 
 
Noncontrolling interest ownership by noncontrolling owners
27.00% 
 
 
Litigation settlement amount
 
 
$ 77