UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
 
Securities Exchange Act of 1934
 
Date of Report: November 5, 2014
 
 
McGRAW HILL FINANCIAL, INC.
 
(Exact Name of Registrant as specified in its charter)
 

New York
1-1023
13-1026995
(State or other
(Commission
(IRS Employer
jurisdiction of
File No.)
Identification No.)
incorporation or
 
 
organization)
 
 
 
1221 Avenue of the Americas, New York, New York 10020
(Address of Principal Executive Offices) (Zip Code)
 
(212) 512-2000
(Registrant’s telephone number, including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





Item 2.02 and 7.01.   Results of Operations and Financial Condition and Regulation FD Disclosure
 
On November 3, 2014, McGraw Hill Financial, Inc. (the “Registrant” or the “Company”) announced it had completed the previously disclosed sale of McGraw Hill Construction to Symphony Technology Group. As announced on September 22, 2014, the sale price was $320 million in cash and the transaction completes the portfolio rationalization to create McGraw Hill Financial.

Beginning in the third quarter of 2014, the results of operations for McGraw Hill Construction have been reclassified to reflect the business as a discontinued operation and the assets and liabilities of the business have been reclassified as held for sale in the Company’s financial statements.

To assist in the understanding of the Company’s continuing operations, the Company has prepared recasted selected financial information which reflects the reclassification of McGraw Hill Construction out of the Company's continuing operations for each of the three quarters and first nine months of 2014 and for each of the four quarters and the full year of 2013.

The recasted selected financial information is attached as Exhibit 99 to this Form 8-K and is incorporated in this Item 2.02 and Item 7.01 by reference. Pursuant to general instruction B.2 to Form 8-K, the information furnished pursuant to Items 2.02 and 7.01, including Exhibit 99, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
 
The information in this Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

Use of Non-GAAP Financial Measures

Non-GAAP financial measures contained in the exhibits to this report are derived from the Company’s financial statements. 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.
 

Item 9.01.   Financial Statements and Exhibits .
 
(d) Exhibits. The following exhibit is furnished with this report:
 
(99)       Recasted selected financial information of the Registrant for each of the three quarters and first nine months of 2014 and for each of the four quarters and the full year of 2013






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 8-K Report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
McGraw Hill Financial, Inc.
 
 
 
 
/s/
Emmanuel N. Korakis
 
 
 
By:
Emmanuel N. Korakis
 
 
 
Senior Vice President and Corporate Controller

 
Dated:  November 5, 2014

 





INDEX TO EXHIBITS
 
 
 
Exhibit Number
 
(99)     Recasted selected financial information of the Registrant for each of the three quarters and first nine months of 2014 and for each of the four quarters and the full year of 2013






McGraw Hill Financial
Recasted Selected Financial Information for Continuing Operations
(dollars in millions, except per share data)
(unaudited)
 
2014
 
 
 
Q1
 
Q2
 
Q3
 
Q3 YTD
 
 
 
Reported 1
Performance
 
Reported 1
Performance
 
Reported 1
Performance
 
Reported 1
Performance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
1,196

$
1,196

 
$
1,302

$
1,302

 
$
1,263

$
1,263

 
$
3,761

$
3,761

 
Segment operating profit (a)
 
454

454

 
521

521

 
404

507

 
1,379

1,482

 
Unallocated expense (b)
 
34

34

 
45

45

 
38

32

 
118

111

 
Operating profit
 
420

420

 
476

476

 
366

475

 
1,261

1,371

 
Interest expense, net  
 
14

14

 
14

14

 
12

12

 
40

40

 
Income before taxes on income
 
406

406

 
462

462

 
354

463

 
1,221

1,331

 
Provision for taxes on income
 
138

138

 
152

152

 
139

155

 
428

445

 
Income from continuing operations
 
$
268

$
268

 
$
310

$
310

 
$
215

$
308

 
$
793

$
886

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS
 
$
0.87

$
0.87

 
$
1.04

$
1.04

 
$
0.68

$
1.02

 
$
2.59

$
2.93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Totals presented may not sum due to rounding
1 Reported amounts above reflect the reclassification of McGraw Hill Construction out of McGraw Hill Financial's continuing operations

Non-GAAP adjustments included in the reported amounts and excluded from performance amounts in the table above:
(a)
Q3 2014 adjustments include a $60 million charge for certain regulatory matters, restructuring charges of $39 million, and $4 million of professional fees largely related to corporate development activities
(b)
Q3 2014 adjustment includes restructuring charges of $7 million




McGraw Hill Financial
Recasted Selected Financial Information for Continuing Operations
(dollars in millions, except per share data)
(unaudited)
 
2013
 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Full Year
 
 
 
Reported 1
Performance
 
Reported 1
Performance
 
Reported 1
Performance
 
Reported 1
Performance
 
Reported 1
Performance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
1,140

$
1,140

 
$
1,205

$
1,205

 
$
1,152

$
1,152

 
$
1,206

$
1,206

 
$
4,702

$
4,702

 
Segment operating profit (a) (b)
 
417

417

 
468

468

 
444

423

 
364

389

 
1,693

1,697

 
Unallocated expense (c) (d) (e) (f)
 
148

28

 
45

34

 
49

38

 
93

42

 
335

142

 
Operating profit
 
269

389

 
423

434

 
395

385

 
271

347

 
1,358

1,555

 
Interest expense, net  
 
15

15

 
16

16

 
14

14

 
14

14

 
59

59

 
Income before taxes on income
 
254

374

 
407

418

 
381

370

 
257

333

 
1,299

1,496

 
Provision for taxes on income
 
86

131

 
141

146

 
123

129

 
75

100

 
425

507

 
Income from continuing operations
 
$
168

$
243

 
$
266

$
272

 
$
258

$
241

 
$
182

$
233

 
$
874

$
989

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS
 
$
0.52

$
0.78

 
$
0.87

$
0.90

 
$
0.82

$
0.77

 
$
0.60

$
0.78

 
$
2.80

$
3.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Totals presented may not sum due to rounding
1 Reported amounts above reflect the reclassification of McGraw Hill Construction out of McGraw Hill Financial's continuing operations

Non-GAAP adjustments included in the reported amounts and excluded from performance amounts in the table above:
(a)
Q3 2013 adjustments include restructuring charges of $4 million, a gain on the sale of an equity investment held by CRISIL of $16 million, a loss on the sale of Financial Communications of $3 million, and a gain on the sale of Aviation Week of $11 million
(b)
Q4 2013 adjustment includes a $26 million restructuring charge
(c)
Q1 2013 adjustments include costs for the separation of MHE of $44 million, and pre-tax legal settlements of $77 million
(d)
Q2 2013 adjustment includes $10 million of costs for the separation of MHE
(e)
Q3 2013 adjustment includes $10 million of costs for the separation of MHE
(f)
Q4 2013 adjustments include a $36 million non-cash impairment charge related to the sale of a data center, and a $13 million charge related to terminating various leases