S&P GLOBAL INC., 10-Q filed on 7/26/2012
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jul. 16, 2012
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
Jun. 30, 2012 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
280.2 
Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Revenue:
 
 
 
 
Product
$ 462 
$ 523 
$ 756 
$ 821 
Service
1,085 
1,034 
2,122 
1,997 
Total revenue
1,547 
1,557 
2,878 
2,818 
Operating-related expenses:
 
 
 
 
Product
213 
239 
376 
411 
Service
361 
354 
728 
685 
Total operating-related expenses
574 
593 
1,104 
1,096 
Selling and general expenses
568 
580 
1,110 
1,083 
Depreciation
23 
25 
46 
50 
Amortization of intangibles
17 
14 
32 
29 
Total expenses
1,182 
1,212 
2,292 
2,258 
Other income
0 
(13)
0 
(13)
Operating income
365 
358 
586 
573 
Interest expense, net
20 
20 
41 
39 
Income from continuing operations before taxes on income
345 
338 
545 
534 
Provision for taxes on income
125 
122 
198 
194 
Income from continuing operations
220 
216 
347 
340 
Loss from discontinued operations, net of tax
0 
0 
0 
(1)
Net income
220 
216 
347 
339 
Less: net income attributable to noncontrolling interests
(4)
(5)
(8)
(8)
Net income attributable to The McGraw-Hill Companies, Inc.
216 
211 
339 
331 
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
 
Income from continuing operations
216 
211 
339 
332 
Loss from discontinued operations, net of tax
0 
0 
0 
(1)
Net income
$ 216 
$ 211 
$ 339 
$ 331 
Earnings per share attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
 
Basic (in usd per share)
$ 0.77 
$ 0.70 
$ 1.22 
$ 1.09 
Diluted (in usd per share)
$ 0.76 
$ 0.68 
$ 1.19 
$ 1.07 
Average number of common shares outstanding:
 
 
 
 
Basic (in shares)
279.7 
303.6 
278.9 
304.4 
Diluted (in shares)
285.3 
309.2 
284.5 
309.4 
Dividend declared per common share (in usd per share)
$ 0.255 
$ 0.250 
$ 0.51 
$ 0.5 
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 220 
$ 216 
$ 347 
$ 339 
Other comprehensive income:
 
 
 
 
Foreign currency translation adjustment, net of tax benefit of $5 million and $6 million for the three and six months ended June 30, 2012 and $4 million and $7 million for the three and six months ended June 30, 2011
(37)
5 
(19)
34 
Pension and other post-retirement benefit plans, net of taxes of $8 million and $10 million for the three and six months ended June 30, 2012, respectively, and $3 million and $6 million for the three and six months ended
13 
10 
18 
14 
Unrealized loss on investments and forward exchange contracts, net of tax benefit of $1 million for the three and six months ended June 30, 2012 and $2 million and $4 million for the three and six months ended June
(2)
(2)
(1)
(6)
Comprehensive income
194 
229 
345 
381 
Less: comprehensive income (loss) attributable to noncontrolling interests
2 
(5)
(5)
(10)
Comprehensive income attributable to The McGraw-Hill Companies, Inc.
$ 196 
$ 224 
$ 340 
$ 371 
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
 
 
 
 
Foreign currency translation adjustment, tax benefit
$ 5 
$ 4 
$ 6 
$ 7 
Pension and other post-retirement benefit plans, tax provision
8 
3 
10 
6 
Unrealized loss on investments and forward exchange contracts, tax benefit
$ 1 
$ 2 
$ 1 
$ 4 
Consolidated Balance Sheets (USD $)
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Current assets:
 
 
 
Cash and equivalents
$ 836,000,000 
$ 944,000,000 
$ 1,300,000,000 
Short-term investments
3,000,000 
29,000,000 
25,000,000 
Accounts receivable, net
1,102,000,000 
1,045,000,000 
1,002,000,000 
Inventories
296,000,000 
263,000,000 
340,000,000 
Deferred income taxes
259,000,000 
260,000,000 
281,000,000 
Prepaid and other current assets
144,000,000 
138,000,000 
255,000,000 
Total current assets
2,640,000,000 
2,679,000,000 
3,203,000,000 
Prepublication costs, net
342,000,000 
325,000,000 
351,000,000 
Property and equipment, net
482,000,000 
500,000,000 
501,000,000 
Goodwill
2,296,000,000 
2,048,000,000 
1,985,000,000 
Other intangible assets, net
1,267,000,000 
608,000,000 
620,000,000 
Other non-current assets
283,000,000 
267,000,000 
284,000,000 
Total assets
7,310,000,000 
6,427,000,000 
6,944,000,000 
Current liabilities:
 
 
 
Accounts payable
232,000,000 
347,000,000 
336,000,000 
Accrued royalties
50,000,000 
119,000,000 
48,000,000 
Accrued compensation and contributions to retirement plans
385,000,000 
510,000,000 
380,000,000 
Short-term debt
400,000,000 
400,000,000 
0 
Income taxes currently payable
111,000,000 
29,000,000 
82,000,000 
Unearned revenue
1,323,000,000 
1,303,000,000 
1,244,000,000 
Other current liabilities
378,000,000 
422,000,000 
433,000,000 
Total current liabilities
2,879,000,000 
3,130,000,000 
2,523,000,000 
Long-term debt
799,000,000 
798,000,000 
1,198,000,000 
Pension and other postretirement benefits
494,000,000 
513,000,000 
436,000,000 
Other non-current liabilities
616,000,000 
402,000,000 
451,000,000 
Total liabilities
4,788,000,000 
4,843,000,000 
4,608,000,000 
Commitments and contingencies (Note 14)
0 
0 
0 
Redeemable noncontrolling interest (Note 10)
792,000,000 
0 
0 
Equity:
 
 
 
Common stock
412,000,000 
412,000,000 
412,000,000 
Additional paid-in capital
442,000,000 
94,000,000 
134,000,000 
Retained income
7,292,000,000 
7,667,000,000 
7,233,000,000 
Accumulated other comprehensive loss
(424,000,000)
(425,000,000)
(327,000,000)
Less: common stock in treasury
(6,059,000,000)
(6,240,000,000)
(5,197,000,000)
Total equity - controlling interests
1,663,000,000 
1,508,000,000 
2,255,000,000 
Total equity - noncontrolling interests
67,000,000 
76,000,000 
81,000,000 
Total equity
1,730,000,000 
1,584,000,000 
2,336,000,000 
Total liabilities and equity
$ 7,310,000,000 
$ 6,427,000,000 
$ 6,944,000,000 
Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Operating Activities:
 
 
Net income
$ 347 
$ 339 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
Depreciation (including amortization of technology projects)
60 
64 
Amortization of intangibles
32 
30 
Amortization of prepublication costs
63 
76 
Provision for losses on accounts receivable
4 
4 
Deferred income taxes
4 
0 
Stock-based compensation
47 
41 
Other
15 
17 
Changes in operating assets and liabilities, net of effect of acquisitions:
 
 
Accounts receivable
(20)
3 
Inventories
(33)
(63)
Prepaid and other current assets
(16)
(16)
Accounts payable and accrued expenses
(351)
(269)
Unearned revenue
(2)
16 
Other current liabilities
(44)
(13)
Net change in prepaid/accrued income taxes
96 
100 
Net change in other assets and liabilities
(47)
9 
Cash provided by operating activities
155 
338 
Investing Activities:
 
 
Investment in prepublication costs
(79)
(60)
Capital expenditures
(42)
(45)
Acquisitions, net of cash acquired
(149)
(126)
Proceeds from dispositions of property and equipment
1 
20 
Changes in short-term investments
26 
(3)
Cash used for investing activities
(243)
(214)
Financing Activities:
 
 
Dividends paid to shareholders
(145)
(152)
Dividends paid to noncontrolling interests
(11)
(9)
Repurchase of treasury shares
0 
(300)
Exercise of stock options
134 
80 
Excess tax benefits from share-based payments
7 
2 
Cash used for financing activities
(15)
(379)
Effect of exchange rate changes on cash
(5)
29 
Net change in cash and equivalents
(108)
(226)
Cash and equivalents at beginning of period
944 
1,526 
Cash and equivalents at end of period
$ 836 
$ 1,300 
Basis of Presentation
Basis of Presentation
Basis of Presentation

The accompanying unaudited financial statements of The McGraw-Hill Companies, Inc. (together with its consolidated subsidiaries, "McGraw-Hill," the “Company,” “we,” “us” or “our”) 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 Annual Report on Form 10-K for the year ended December 31, 2011 (our “Annual Report”).

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 and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the full year, partially due to the seasonal nature of some of our businesses. As a result, we have included the consolidated balance sheet as of June 30, 2011 for comparative purposes. Certain prior-year amounts have been reclassified to conform to the current presentation.

We have reported our Broadcasting Group, previously included in our Commodities & Commercial (“C&C”) segment, as a discontinued operation. We completed the sale on December 30, 2011 and, accordingly, the results of operations of the Broadcasting Group for all prior periods presented have been reclassified to reflect the business as a discontinued operation and the assets and liabilities of the business have been removed from the consolidated balance sheet as of December 31, 2011 and reclassified as held for sale as of June 30, 2011. See Note 3 for further discussion.

Our critical accounting estimates are disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts and sales returns, inventories, prepublication costs, accounting for the impairment of long-lived assets (including other intangible assets), goodwill and indefinite-lived intangible assets, retirement plans and post-retirement healthcare and other benefits, stock-based compensation, income taxes and contingencies. Since the date of our Annual Report, there have been no material changes to our critical accounting policies and estimates.
Growth and Value Plan
Growth and Value Plan
Growth and Value Plan

On September 12, 2011, we announced that our Board of Directors have unanimously approved a comprehensive Growth and Value Plan that includes separation into two public companies: McGraw-Hill Financial, focused on content and analytics for the financial markets, and McGraw-Hill Education, Inc. focused on education services and digital learning. The separation will be accomplished through a series of transactions in which the assets, liabilities and operations of the current McGraw-Hill Education segment ("MHE") of McGraw-Hill on a global basis will be transferred to McGraw-Hill Education, Inc. or entities that are, or will become prior to the separation, subsidiaries of McGraw-Hill Education, Inc. Each shareholder of McGraw-Hill will receive one share of McGraw-Hill Education, Inc. common stock for every three shares of McGraw-Hill common stock held on the record date for the share distribution. Current holders of McGraw-Hill stock will also retain their shares of McGraw-Hill.

We received a favorable tax ruling from the Internal Revenue Service on April 23, 2012, which provides that the separation of McGraw-Hill Education, Inc. will be tax free to the Company and its shareholders. In addition, we filed the initial McGraw-Hill Education, Inc. Form 10 registration statement with the U.S. Securities and Exchange Commission on July 11, 2012. We expect to complete the separation by the end of 2012 through a spin-off of the education business to the Company’s shareholders, subject to various conditions and regulatory approvals, including final Board approval. While we are pursuing a separation as described above we are also actively evaluating other options to deliver shareholder value, including a potential sale of MHE.

For the three and six months ended June 30, 2012, we recorded $42 million and $75 million, respectively, of Growth and Value Plan related costs. These are costs necessary to enable separation, reduce our cost structure, accelerate growth and increase shareholder value. Specifically, these costs relate to professional fees, transaction costs for our S&P/Dow Jones Indices, LLC joint venture, severance charges, and for the six months, a charge related to a reduction in our lease commitments, and are included in selling and general expenses in the consolidated statements of income. Total costs incurred to date related to the Growth and Value Plan are $85 million.
Acquisitions and Divestitures
Acquisitions and Divestitures
Acquisitions and Divestitures

Acquisitions

Acquisition of Coalition Development Ltd.

On July 4, 2012, CRISIL, our majority owned Indian credit rating agency, completed the acquisition of Coalition Development Ltd. (“Coalition”), a privately-held U.K. analytics company, and its subsidiaries. Coalition provides high-end analytics to leading global investment banks and other financial services firms. Coalition will be integrated into CRISIL's Global Research & Analytics business within our Standard & Poor's Ratings segment. Including the pro forma impact on earnings, the acquisition of Coalition was not material to our consolidated financial statements.

Acquisition of Dow Jones Index Business

On June 29, 2012 (the "Acquisition Date"), we closed our transaction with CME Group, Inc. (“CME Group”) and CME Group Index Services LLC (“CGIS”), a joint venture between CME Group and Dow Jones & Company, Inc., to form a new company, S&P/Dow Jones Indices, LLC (“S&P/DJ Indices”). We own 73% and CME Group and CGIS collectively own 27% of S&P/DJ Indices. In exchange for their 27% minority interest, CME Group and CGIS contributed their Dow Jones Index (“DJI”) business; in exchange for our 73% and controlling interest, we contributed our Standard & Poor's Index (“S&P Index”) business. The DJI business focuses on the development of financial benchmarks used by licensees to create exchange-traded funds, option contracts and futures contracts traded on exchanges as well as used as a metric to evaluate economic performance. The combination of these businesses creates the world's largest provider of financial market indices; we expect to increase revenue through international and asset-class expansion, new product development, enhanced market data offerings and increased cross-selling opportunities. The proforma impact on revenue and earnings from our joint venture with the DJI business was not material to our consolidated results for the three and six months ended June 30, 2012.

The terms of the operating agreement of S&P/DJ Indices contain redemption features whereby interests held by minority partners are redeemable. See Note 10 for further discussion.

Acquisition-Related Expenses

During the three and six months ended June 30, 2012, the Company incurred $15 million of acquisition-related costs related to the formation of S&P/DJ Indices. These expenses are included in selling and general expenses in our unaudited consolidated statements of income.

Preliminary Allocation of Purchase Price

Because we consolidate S&P/DJ Indices, we have applied acquisition accounting to the S&P/DJ Indices contributed businesses and their results of operations will be included in our consolidated results of operations subsequent to the Acquisition Date.

The fair value of the DJI business acquired of $792 million was estimated by applying a market approach and an income approach. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The fair value estimates of the proportionate shares of the contributed businesses are based on, but not limited to, future expected cash flows, appropriate discount rates ranging from 10% to 11%, long term growth rates of 2.5 to 3.5%, assumed financial multiples of companies deemed to be similar to the DJI, and market rate assumptions for contractual obligations. S&P Index continues to be recorded at its historical or carry-over basis.

At the Acquisition Date, our non-controlling interest has been recorded at the fair value of DJI we acquired plus the proportionate interest of the S&P Index business at our carry-over basis. As of June 30, 2012, we recorded a redeemable noncontrolling interest in our consolidated financial statements (see Note 10 for further discussion) at the preliminary fair value of 27% of S&P/DJ Indices or $792 million due to the redemption provisions described above, representing CME Group's and CGIS' interest in S&P/DJ Indices.

The estimated values are not yet final and are subject to change, and the changes could be significant. We will finalize the amounts recognized as soon as possible as we obtain the information necessary to complete our analysis.

The tables below present the consideration transferred and the preliminary allocation of purchase price to the assets and liabilities of the DJI business acquired as a result of the transaction.

Consideration Transferred
(in millions)
 
Fair value of 27% of S&P Index exchanged
$
571

Fair value of noncontrolling interest associated with DJI
221

Total
$
792



Preliminary Purchase Price Allocation
(in millions)
 
Current assets
$
82

Intangible assets:
 
Other intangibles
633

Goodwill
96

Property and equipment
4

Current liabilities
(23
)
Total net assets
$
792



The intangible assets, excluding goodwill, will be amortized over their anticipated useful lives, which will be determined when we finalize our purchase price allocation.

Income Taxes

We are responsible for the tax matters for S&P/DJ Indices, including the filing of returns and the administration of any proceedings with taxing authorities. For U.S. federal income tax purposes, S&P/DJ Indices is treated as a partnership. The income of S&P/DJ Indices will flow through and be subject to tax at the partners' level. However S&P/DJ Indices is expected to incur current and deferred income taxes in a limited number of states and localities and its foreign subsidiaries are expected to incur immaterial current and deferred foreign income taxes.

We recognized $216 million of non-current deferred tax liabilities in connection with CME Group and CGIS acquiring an indirect noncontrolling interest in the S&P Index business in exchange for our acquisition of a portion of our interest in the DJI business. Because we maintained control of the S&P Index business, the excess of fair value received over historical carrying value and the related tax impact were recorded in additional paid-in capital.

Goodwill and Identifiable Intangibles

Goodwill consists primarily of intangible assets that do not qualify for separate recognition, including assembled workforce, noncontractual relationships and agreements. Because our allocation of purchase price and estimated values of identifiable assets and liabilities are not yet final, the amount of total goodwill and identifiable intangibles are not yet final and subject to change. The goodwill is not expected to be deductible for tax purposes.

Acquisition of Credit Market Analysis Limited

On June 29, 2012 we acquired Credit Market Analysis Limited (“CMA”) from the CME Group. CMA provides independent data in the over-the-counter markets. CMA's data and technology will enhance our capability to provide clear, reliable pricing and related over-the-counter information. CMA will be integrated into our S&P Capital IQ / S&P Indices segment. Including the pro forma impact on earnings, the acquisition of CMA was not material to our consolidated financial statements.

Acquisition of QuantHouse

On April 3, 2012 we completed the acquisition of QuantHouse, an independent global provider of end-to-end systematic low-latency market data solutions. QuantHouse will be integrated into our S&P Capital IQ / S&P Indices segment. The acquisition allows us to offer unique real-time monitors, derived data sets and analytics as well as the ability to package and resell this data as part of a core solution. Including the pro forma impact on earnings, the acquisition of QuantHouse was not material to our consolidated financial statements.

Acquisition of R² Technologies

On February 8, 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 will be integrated into our S&P Capital IQ / S&P Indices segment. Including the pro forma impact on earnings, the acquisition of R² was not material to our consolidated financial statements.

Divestitures

We did not complete any dispositions during the six months ended June 30, 2012.

During the three months and six months ended June 30, 2011, we recorded a pretax gain of $13 million within other income in the consolidated statements of income, which related to the sale of our interest in LinkedIn Corporation in their initial public offering. This investment was held at our C&C segment.

On December 30, 2011, we completed the sale of the Broadcasting Group with The E.W. Scripps Company. This sale followed our previously announced plan to pursue the divestiture of our Broadcasting Group, which was part of our C&C segment. As a result, the results of operations of the Broadcasting Group for all prior periods presented have been reclassified to reflect the business as a discontinued operation, and the assets and liabilities of the business have been removed from the consolidated balance sheet as of December 31, 2011 and reclassified as held for sale as of June 30, 2011.

The key components of loss from discontinued operations consist of the following for the three and six months ended June 30, 2011:
 
(in millions)
Three Months
 
Six Months
Revenue
$
23

 
$
44

Costs and expenses
22

 
44

Loss before taxes on income
1

 
—

Provision for taxes on income
(1
)
 
(1
)
Loss from discontinued operations, net of tax
$
—

 
$
(1
)


The components of assets and liabilities classified as discontinued operations and included in prepaid and other current assets and other current liabilities in the consolidated balance sheet consist of the following as of:
 
(in millions)
June 30,
2011
Accounts receivable, net
$
19

Property and equipment, net
25

Other intangible assets, net
46

Other current assets
8

Assets held for sale
$
98

 
 
Accounts payable and accrued expenses
$
7

Other current liabilities
5

Liabilities held for sale
$
12

Supplementary Balance Sheet Data
Supplementary Balance Sheet Data
Supplementary Balance Sheet Data 
(in millions)
June 30,
2012
 
December 31,
2011
 
June 30,
2011
Accounts receivable — allowance for doubtful accounts
$
52

 
$
55

 
$
70

Accounts receivable — allowance for sales returns
120

 
187

 
146

Prepublication costs — accumulated amortization
1,120

 
1,066

 
955

Property and equipment — accumulated depreciation
1,006

 
1,066

 
1,056

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements

In accordance with authoritative guidance for fair value measurements, certain assets and liabilities are required to be recorded at fair value and classified within a fair value hierarchy based on inputs used when measuring fair value. We have investments in equity securities classified as available-for-sale and an immaterial amount of forward exchange contracts that are adjusted to fair value on a recurring basis. The fair values of our investments in available-for-sale securities were determined using quoted market prices from daily exchange traded markets and are classified within Level 1 of the valuation hierarchy. The fair values of our available-for-sale securities are $11 million, $14 million and $12 million as of June 30, 2012, December 31, 2011 and June 30, 2011, respectively, and are included in other non-current assets in the consolidated balance sheets.

Other financial instruments, including cash and equivalents and short-term investments, are recorded at cost, which approximates fair value because of the short-term maturity and highly liquid nature of these instruments. The fair value of our total borrowings for each period presented is $1.3 billion and was estimated based on quoted market prices.
Income Taxes
Income Taxes
Income Taxes

For the three and six months ended June 30, 2012 and 2011, the effective tax rate for continuing operations was 36.3%. Including discontinued operations, the effective tax rate was 36.4% for the three and six months ended June 30, 2011.

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 June 30, 2012, December 31, 2011 and June 30, 2011, the total amount of federal, state and local, and foreign unrecognized tax benefits was $66 million, $57 million and $62 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 June 30, 2012, December 31, 2011 and June 30, 2011, we had $15 million, $13 million and $15 million, respectively, of accrued interest and penalties associated with uncertain tax positions.
Debt
Debt
Debt 
(in millions)
June 30,
2012
 
December 31,
2011
 
June 30,
2011
5.375% Senior Notes, due 2012 1
$
400

 
$
400

 
$
400

5.9% Senior Notes, due 2017 2
399

 
399

 
399

6.55% Senior Notes, due 2037 3
399

 
399

 
399

Notes payable
1

 
—

 
—

Total debt
1,199

 
1,198

 
1,198

Less: short-term debt including current maturities
400

 
400

 
—

Long-term debt
$
799

 
$
798

 
$
1,198

1 
Interest payments are due on February 15 and August 15, and, as of June 30, 2012, the unamortized debt discount is less than $0.1 million. These senior notes will mature on November 15, 2012.
2 
Interest payments are due on April 15 and October 15, and, as of June 30, 2012, the unamortized debt discount is $0.5 million.
3 
Interest payments are due on May 15 and November 15, and, as of June 30, 2012, the unamortized debt discount is $1.3 million.

Currently, we have the ability to borrow $1.2 billion in additional funds 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 20 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 June 30, 2012, we have not utilized our credit facility for additional funds.

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. This amendment decreased our pension benefit liabilities by $129 million as of December 31, 2011, and resulted in an after-tax decrease in accumulated other comprehensive loss of $82 million. We also recorded an immaterial amount of pension plan curtailment expense in 2011 as a result of the plan amendment.

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 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.

The components of net periodic benefit cost for our retirement plans and post-retirement plans for the periods ended June 30 are as follows:
 
(in millions)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Retirement Plans
 
 
 
 
 
 
 
Service cost
$
(1
)
 
$
16

 
$
18

 
$
34

Interest cost
23

 
25

 
46

 
50

Expected return on plan assets
(31
)
 
(32
)
 
(62
)
 
(64
)
Amortization of actuarial loss
8

 
8

 
16

 
15

Net periodic benefit cost
$
(1
)
 
$
17

 
$
18

 
$
35


Post-Retirement Plans
 
 
 
 
 
 
 
Service cost
$
—

 
$
1

 
$
1

 
$
1

Interest cost
2

 
1

 
3

 
3

Amortization of prior service credit
(1
)
 
—

 
(1
)
 
—

Net periodic benefit cost
$
1

 
$
2

 
$
3

 
$
4



For the three and six months ended June 30, 2012, our United Kingdom retirement plan accounted for $1 million and $2 million, respectively, of the net periodic benefit cost attributable to the funded plans. For the six months ended June 30, 2011, our United Kingdom retirement plan accounted for $2 million of the net periodic benefit cost attributable to the funded plans.

As discussed in our Annual Report, we changed certain discount rate assumptions on our retirement and post-retirement plans and our expected return on assets assumption for our retirement plans, which became effective on January 1, 2012. The effect of the assumption changes on retirement and post-retirement expense for the three and six months ended June 30, 2012 did not have a material impact to our financial position, results of operations or cash flows.

In the first six months of 2012, we contributed $29 million to our retirement plans and expect to make additional required contributions of approximately $15 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 second half of 2012.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation

We issue stock-based incentive awards to our eligible employees and Directors under two employee stock ownership plans (the 1993 and 2002 Employee Stock Incentive Plans) and a Director Deferred Stock Ownership Plan. No further awards may be granted under the 1993 Employees Stock Incentive Plan, although awards granted under this plan remain outstanding in accordance with their terms. The remaining outstanding options under the 1993 Employees Stock Incentive Plan will have fully met their maximum term 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 periods ended June 30 is as follows:

(in millions)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Stock option expense
$
2

 
$
6

 
$
8

 
$
12

Restricted stock and unit awards expense
25

 
17

 
39

 
29

Total stock-based compensation expense
$
27

 
$
23

 
$
47

 
$
41



As of June 30, 2012, December 31, 2011 and June 30, 2011, we issued 0.7 million, 4.4 million and 2.6 million common shares, respectively, upon exercise of certain stock options outstanding.

Historically, we have granted equity awards to our employees at the beginning of the second quarter, however, given the timing of our Growth and Value Plan initiatives we have decided to defer granting these awards until the third quarter of 2012. The vesting period of these awards will be reduced to have a similar vesting date as if the awards were granted at the beginning of the second quarter.
Equity
Equity
Equity

Stock Repurchases

In 2011, the Board of Directors approved a new 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 periods ended June 30 were as follows:
 
(in millions, except average price)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Total number of shares purchased — 2011 Repurchase Program 1
0.1

 
—

 
0.9

 
—

Total number of shares purchased — 2007 Repurchase Program
—

 
4.4

 
—

 
7.7

Average price paid per share
$
—

 
$
40.10

 
$
—

 
$
38.96

Total cash utilized
$
—

 
$
177

 
$
—

 
$
300

 
1 
Represents shares received at the conclusion of the uncollared Accelerated Share Repurchase Agreement 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 June 30, 2012, 22.7 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. As of December 31, 2011, there were no remaining shares available under the 2007 stock repurchase program.

Accelerated Share Repurchase Program

On December 7, 2011 we entered into two separate Accelerated Share Repurchase Agreements (“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 volume weighted average price (“VWAP”) of our common stock between December 7, 2011 and February 22, 2012.
•
The second ASR Agreement was structured as a capped ASR Agreement for the repurchase of $250 million of shares at a per share price that was capped based on 110% of the VWAP of our common stock during the period from December 7, 2011 through December 21, 2011. This capped price set the minimum number of shares that will be repurchased.

Uncollared ASR Agreement

We paid $250 million on December 12, 2011 and received an initial delivery of approximately 5 million shares from the financial institution subject to a 20%, or $50 million, holdback. At the conclusion of the uncollared ASR Agreement, which occurred on February 22, 2012, we received 0.8 million additional shares bringing the total shares repurchased under the uncollared ASR Agreement to approximately 6 million shares.

Capped ASR Agreement

We paid $250 million and received approximately 5 million shares representing the minimum number of common shares to be repurchased based on a calculation using a specific capped price per share. At the conclusion of the capped ASR Agreement, which occurred on April 23, 2012, we received 0.1 million additional shares bringing the total shares repurchased under the capped ASR Agreement to approximately 5 million shares.

The ASR Agreements were accounted for as two transactions; a stock purchase transaction and a forward stock purchase contract. The initial delivery of shares resulted in an immediate reduction of our outstanding shares used to determine our weighted average common shares outstanding for purposes of calculating basic and diluted net earnings per share. The forward stock purchase contract is classified as an equity instrument. As of June 30, 2012 and December 31, 2011, the excess amount paid on a per share basis for the minimum shares purchased under the capped ASR Agreement was recorded as a reduction to additional paid-in capital in our consolidated balance sheets. We have evaluated the Capped ASR Agreement for its potential dilution and as a result, these additional shares were not included in our weighted average diluted earnings per share calculation because their effect would be antidilutive.

Redeemable Noncontrolling Interests

The agreement with the minority partners of our S&P/DJ Indices partnership discussed in Note 3 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 and 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/DJ Indices. 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 unaudited consolidated balance sheet 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. Redeemable noncontrolling interest will be adjusted each reporting period at its estimated redemption value, but not less than its initial fair value. Any adjustments to the redemption value will impact retained income.

Noncontrolling interests that do not contain such redemption features are presented in equity.
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 periods ended June 30 is as follows:
 
(in millions, except per share amounts)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
 
 
 
 
Income from continuing operations
$
216

 
$
211

 
$
339

 
$
332

Loss from discontinued operations, net of tax
—

 
—

 
—

 
(1
)
Net income attributable to the Company
$
216

 
$
211

 
$
339

 
$
331

 
 
 
 
 
 
 
 
Basic weighted-average number of common shares outstanding
279.7

 
303.6

 
278.9

 
304.4

Effect of stock options and other dilutive securities
5.6

 
5.6

 
5.6

 
5.0

Diluted weighted-average number of common shares outstanding
285.3

 
309.2

 
284.5

 
309.4

 
 
 
 
 
 
 
 
Basic EPS:
 
 
 
 
 
 
 
Income from continuing operations
$
0.77

 
$
0.70

 
$
1.22

 
$
1.09

Loss from discontinued operations, net of tax
—

 
—

 
—

 
—

Net income
$
0.77

 
$
0.70

 
$
1.22

 
$
1.09

Diluted EPS:
 
 
 
 
 
 
 
Income from continuing operations
$
0.76

 
$
0.68

 
$
1.19

 
$
1.07

Loss from discontinued operations, net of tax
—

 
—

 
—

 
—

Net income
$
0.76

 
$
0.68

 
$
1.19

 
$
1.07



Restricted performance shares outstanding of 1.4 million and 1.6 million as of June 30, 2012 and June 30, 2011, 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 June 30, 2012 and 2011, the number of stock options excluded from the computation was 3.8 million and 10.0 million, respectively, and 4.0 million and 10.8 million for the six months ended June 30, 2012 and 2011, respectively.
Restructuring
Restructuring
Restructuring

In order to contain costs and mitigate the impact of current and expected future economic conditions, as well as a continued focus on process improvements, we have initiated various restructuring plans over the last several years. 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.

During the fourth quarter of 2011, we initiated a restructuring plan to create a flatter and more agile organization as part of our Growth and Value Plan, which includes creating two independent public companies with focused cost structures. While initially focused on our MHE segment, these actions also included other parts of the Company. We recorded a pre-tax restructuring charge of $66 million, consisting primarily of facility exit costs and employee severance costs related to a company-wide workforce reduction of approximately 800 positions. 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 June 30, 2012, we have reduced the reserve by $12 million, primarily relating to cash payments for employee severance costs, mainly at MHE. The remaining reserve as of June 30, 2012 is $37 million and is included in other current liabilities in the unaudited consolidated balance sheet.

As of June 30, 2012, our 2006 restructuring initiative still has a remaining reserve relating to facilities costs of $3 million.
Segment and Related Information
Segment and Related Information
Segment and Related Information

We have four reportable segments: Standard & Poor’s Ratings (“S&P Ratings”), S&P Capital IQ / S&P Indices, C&C and MHE.

•
S&P Ratings provides independent global credit ratings, credit risk evaluations, and ratings-related information research to investors, corporations, governments, financial institutions, investment managers and advisors globally.
•
S&P Capital IQ / S&P Indices provides comprehensive value-added financial data, information, indices and research services to investors, corporations, governments, financial institutions, investment managers and advisors globally.
•
C&C includes business and professional media, offering information, insight and analysis; and consists of business to business companies (including such brands as Platts, J.D. Power and Associates (“JDPA”), McGraw-Hill Construction and Aviation Week). In accordance with the presentation of the Broadcasting Group as discontinued operations, the results of operations for all prior periods presented have been reclassified to reflect this change. See Note 3 for further discussion.
•
MHE is one of the leading global educational publishers. This segment consists of two operating groups: the Higher Education, Professional and International Group (“HPI”), serving the college, professional, international and adult education markets, and the School Education Group (“SEG”), serving the elementary and high school markets.

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 income. A summary of operating results by segment for the periods ended June 30 is as follows:
 
Three Months
2012
 
2011
(in millions)
Revenue
 
Operating Income
 
Revenue
 
Operating Income
S&P Ratings
$
483

  
$
208

 
$
480

  
$
213

S&P Capital IQ / S&P Indices
366

  
100

 
333

  
98

C&C
241

  
71

 
222

  
49

MHE
474

  
57

 
537

  
42

Intersegment elimination 1
(17
)
 
—

 
(15
)
1 

—

Total operating segments
1,547

  
436

 
1,557

  
402

General corporate expense
—

  
(71
)
 
—

  
(44
)
Total
$
1,547

  
$
365

 
$
1,557

  
$
358


Six Months
2012
 
2011
(in millions)
Revenue
 
Operating
Income (Loss)
 
Revenue
 
Operating
Income (Loss)
S&P Ratings
$
949

  
$
394

 
$
923

  
$
403

S&P Capital IQ / S&P Indices
719

  
207

 
657

  
194

C&C
474

  
135

 
429

  
87

MHE
770

  
(8
)
 
839

  
(33
)
Intersegment elimination 1
(34
)
1  
—

 
(30
)
1 

—

Total operating segments
2,878

  
728

 
2,818

  
651

General corporate expense
—

  
(142
)
 
—

  
(78
)
Total
$
2,878

  
$
586

 
$
2,818

  
$
573


1 
Revenue for S&P Ratings and expenses for S&P Capital IQ / S&P Indices include an intersegment royalty charged to S&P Capital IQ / S&P Indices for the rights to use and distribute content and data developed by S&P Ratings.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Rental Expense and Lease Obligations

As of June 30, 2012, the remaining deferred gain related to our sale-leaseback transaction with Rock-McGraw, Inc. was $129 million, as $3 million and $7 million was amortized during the three and six months ended June 30, 2012, respectively. Interest expense associated with this operating lease for the three and six months ended June 30, 2012 was $2 million and $3 million, respectively.

Related Party Agreements

We entered into a new license agreement (the "License Agreement") with the holder of S&P/DJ Indices noncontrolling interest, CME Group, which replaced the 2005 license agreement between S&P Indices and CME Group. Under the terms of the License Agreement, S&P/DJ Indices receives a share of the profits from the trading and clearing of CME Group's equity index products. During the three months ended June 30, 2012, S&P/DJ Indices earned an immaterial amount of revenue under the terms of the License Agreement. The entire amount of this revenue is included in our unaudited 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 Annual Report.

•
In connection with the Reese matter, on April 2, 2012, the District Court entered judgment granting the Defendants’ motion to dismiss, and dismissing all claims asserted against the Defendants in their entirety. The Lead Plaintiff has appealed the dismissal order.
•
In connection with the Gearren and Sullivan matters, on February 23, 2012, the Court of Appeals denied the plaintiffs’ petition for reconsideration by the full Court. Plaintiffs have filed a petition with the United States Supreme Court asking it to review the decision.
•
The Civil Division of the Department of Justice (“DOJ”) and the Division of Enforcement of the Securities and Exchange  Commission (“SEC”) are investigating potential violations of civil provisions of federal law relating to S&P's ratings of structured products. We have been in discussions with representatives of the DOJ and the SEC presenting our position on the issues raised by them and articulating why neither of them should commence proceedings adverse to the Company or its personnel.

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 Annual Report, 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 Annual Report 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.
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards

In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance that simplified how an entity tests goodwill for impairment. The revised guidance provides an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment. Under the revised guidance, an entity is permitted to first assess qualitative factors to determine whether goodwill impairment exists prior to performing analyses comparing the fair value of a reporting unit to its carrying amount. If, after assessing the totality of events or circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is required. Otherwise, no further testing is required. The guidance is effective beginning January 1, 2012; however, early adoption is permitted. We adopted the FASB’s guidance during the three months ended December 31, 2011. The adoption of the guidance did not have a significant impact on our financial position, results of operations or cash flows.

In May 2011, the FASB issued new guidance for fair value measurements intended to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amended guidance provides a consistent definition of fair value to ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. The amended guidance changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 fair value measurements. The amended guidance, which went into effect for us beginning January 1, 2012, did not have a significant impact on our financial position, results of operations or cash flows.

In June 2011, the FASB issued guidance that modified how comprehensive income is presented in an entity’s financial statements. The guidance issued requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and eliminates the option to present the components of other comprehensive income as part of the statement of equity. The revised financial statement presentation for comprehensive income was effective on January 1, 2012 and has been incorporated into this quarterly report on Form 10-Q.
Accounting Policies (Policies)
Goodwill impairment 
In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance that simplified how an entity tests goodwill for impairment. The revised guidance provides an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment. Under the revised guidance, an entity is permitted to first assess qualitative factors to determine whether goodwill impairment exists prior to performing analyses comparing the fair value of a reporting unit to its carrying amount. If, after assessing the totality of events or circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is required. Otherwise, no further testing is required. The guidance is effective beginning January 1, 2012; however, early adoption is permitted. We adopted the FASB’s guidance during the three months ended December 31, 2011. The adoption of the guidance did not have a significant impact on our financial position, results of operations or cash flows.
Fair Value Measurements 
In May 2011, the FASB issued new guidance for fair value measurements intended to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amended guidance provides a consistent definition of fair value to ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. The amended guidance changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 fair value measurements. The amended guidance, which went into effect for us beginning January 1, 2012, did not have a significant impact on our financial position, results of operations or cash flows.
Presentation of Comprehensive Income 
In June 2011, the FASB issued guidance that modified how comprehensive income is presented in an entity’s financial statements. The guidance issued requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and eliminates the option to present the components of other comprehensive income as part of the statement of equity. The revised financial statement presentation for comprehensive income was effective on January 1, 2012 and has been incorporated into this quarterly report on Form 10-Q.
Acquisitions and Divestitures (Tables)
Schedule of considerations transfered for the S&P/DJ Indices acquisition 
Consideration Transferred
(in millions)
 
Fair value of 27% of S&P Index exchanged
$
571

Fair value of noncontrolling interest associated with DJI
221

Total
$
792

Schedule of purchase price allocation for the S&P/DJ Indices acquisition 
Preliminary Purchase Price Allocation
(in millions)
 
Current assets
$
82

Intangible assets:
 
Other intangibles
633

Goodwill
96

Property and equipment
4

Current liabilities
(23
)
Total net assets
$
792

Reclassified results of income (loss) from discontinued operations 
The key components of loss from discontinued operations consist of the following for the three and six months ended June 30, 2011:
 
(in millions)
Three Months
 
Six Months
Revenue
$
23

 
$
44

Costs and expenses
22

 
44

Loss before taxes on income
1

 
—

Provision for taxes on income
(1
)
 
(1
)
Loss from discontinued operations, net of tax
$
—

 
$
(1
)
Components of assets and liabilities classified as discontinued operations 
The components of assets and liabilities classified as discontinued operations and included in prepaid and other current assets and other current liabilities in the consolidated balance sheet consist of the following as of:
 
(in millions)
June 30,
2011
Accounts receivable, net
$
19

Property and equipment, net
25

Other intangible assets, net
46

Other current assets
8

Assets held for sale
$
98

 
 
Accounts payable and accrued expenses
$
7

Other current liabilities
5

Liabilities held for sale
$
12

Supplementary Balance Sheet Data (Tables)
Supplementary Balance Sheet Data
(in millions)
June 30,
2012
 
December 31,
2011
 
June 30,
2011
Accounts receivable — allowance for doubtful accounts
$
52

 
$
55

 
$
70

Accounts receivable — allowance for sales returns
120

 
187

 
146

Prepublication costs — accumulated amortization
1,120

 
1,066

 
955

Property and equipment — accumulated depreciation
1,006

 
1,066

 
1,056

Debt (Tables)
Short-term and long-term debt outstanding
(in millions)
June 30,
2012
 
December 31,
2011
 
June 30,
2011
5.375% Senior Notes, due 2012 1
$
400

 
$
400

 
$
400

5.9% Senior Notes, due 2017 2
399

 
399

 
399

6.55% Senior Notes, due 2037 3
399

 
399

 
399

Notes payable
1

 
—

 
—

Total debt
1,199

 
1,198

 
1,198

Less: short-term debt including current maturities
400

 
400

 
—

Long-term debt
$
799

 
$
798

 
$
1,198

1 
Interest payments are due on February 15 and August 15, and, as of June 30, 2012, the unamortized debt discount is less than $0.1 million. These senior notes will mature on November 15, 2012.
2 
Interest payments are due on April 15 and October 15, and, as of June 30, 2012, the unamortized debt discount is $0.5 million.
3 
Interest payments are due on May 15 and November 15, and, as of June 30, 2012, 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 post-retirement plans for the periods ended June 30 are as follows:
 
(in millions)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Retirement Plans
 
 
 
 
 
 
 
Service cost
$
(1
)
 
$
16

 
$
18

 
$
34

Interest cost
23

 
25

 
46

 
50

Expected return on plan assets
(31
)
 
(32
)
 
(62
)
 
(64
)
Amortization of actuarial loss
8

 
8

 
16

 
15

Net periodic benefit cost
$
(1
)
 
$
17

 
$
18

 
$
35


Post-Retirement Plans
 
 
 
 
 
 
 
Service cost
$
—

 
$
1

 
$
1

 
$
1

Interest cost
2

 
1

 
3

 
3

Amortization of prior service credit
(1
)
 
—

 
(1
)
 
—

Net periodic benefit cost
$
1

 
$
2

 
$
3

 
$
4

Stock-Based Compensation (Tables)
Stock-Based Compensation
Stock-based compensation for the periods ended June 30 is as follows:

(in millions)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Stock option expense
$
2

 
$
6

 
$
8

 
$
12

Restricted stock and unit awards expense
25

 
17

 
39

 
29

Total stock-based compensation expense
$
27

 
$
23

 
$
47

 
$
41

Equity (Tables)
Share repurchases
Share repurchases for the periods ended June 30 were as follows:
 
(in millions, except average price)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Total number of shares purchased — 2011 Repurchase Program 1
0.1

 
—

 
0.9

 
—

Total number of shares purchased — 2007 Repurchase Program
—

 
4.4

 
—

 
7.7

Average price paid per share
$
—

 
$
40.10

 
$
—

 
$
38.96

Total cash utilized
$
—

 
$
177

 
$
—

 
$
300

 
1 
Represents shares received at the conclusion of the uncollared Accelerated Share Repurchase Agreement described in more detail below.

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 periods ended June 30 is as follows:
 
(in millions, except per share amounts)
Three Months Ended
 
Six Months Ended
 
2012
 
2011
 
2012
 
2011
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
 
 
 
 
Income from continuing operations
$
216

 
$
211

 
$
339

 
$
332

Loss from discontinued operations, net of tax
—

 
—

 
—

 
(1
)
Net income attributable to the Company
$
216

 
$
211

 
$
339

 
$
331

 
 
 
 
 
 
 
 
Basic weighted-average number of common shares outstanding
279.7

 
303.6

 
278.9

 
304.4

Effect of stock options and other dilutive securities
5.6

 
5.6

 
5.6

 
5.0

Diluted weighted-average number of common shares outstanding
285.3

 
309.2

 
284.5

 
309.4

 
 
 
 
 
 
 
 
Basic EPS:
 
 
 
 
 
 
 
Income from continuing operations
$
0.77

 
$
0.70

 
$
1.22

 
$
1.09

Loss from discontinued operations, net of tax
—

 
—

 
—

 
—

Net income
$
0.77

 
$
0.70

 
$
1.22

 
$
1.09

Diluted EPS:
 
 
 
 
 
 
 
Income from continuing operations
$
0.76

 
$
0.68

 
$
1.19

 
$
1.07

Loss from discontinued operations, net of tax
—

 
—

 
—

 
—

Net income
$
0.76

 
$
0.68

 
$
1.19

 
$
1.07

Segment and Related Information (Tables)
Segment information
A summary of operating results by segment for the periods ended June 30 is as follows:
 
Three Months
2012
 
2011
(in millions)
Revenue
 
Operating Income
 
Revenue
 
Operating Income
S&P Ratings
$
483

  
$
208

 
$
480

  
$
213

S&P Capital IQ / S&P Indices
366

  
100

 
333

  
98

C&C
241

  
71

 
222

  
49

MHE
474

  
57

 
537

  
42

Intersegment elimination 1
(17
)
 
—

 
(15
)
1 

—

Total operating segments
1,547

  
436

 
1,557

  
402

General corporate expense
—

  
(71
)
 
—

  
(44
)
Total
$
1,547

  
$
365

 
$
1,557

  
$
358


Six Months
2012
 
2011
(in millions)
Revenue
 
Operating
Income (Loss)
 
Revenue
 
Operating
Income (Loss)
S&P Ratings
$
949

  
$
394

 
$
923

  
$
403

S&P Capital IQ / S&P Indices
719

  
207

 
657

  
194

C&C
474

  
135

 
429

  
87

MHE
770

  
(8
)
 
839

  
(33
)
Intersegment elimination 1
(34
)
1  
—

 
(30
)
1 

—

Total operating segments
2,878

  
728

 
2,818

  
651

General corporate expense
—

  
(142
)
 
—

  
(78
)
Total
$
2,878

  
$
586

 
$
2,818

  
$
573


1 
Revenue for S&P Ratings and expenses for S&P Capital IQ / S&P Indices include an intersegment royalty charged to S&P Capital IQ / S&P Indices for the rights to use and distribute content and data developed by S&P Ratings.
Growth and Value Plan (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 10 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Jun. 30, 2012
Spinoff and Related Activities Disclosure [Abstract]
 
 
 
Spin-off distribution ratio, spinnee shares to be eceived
 
1 
 
Spinoff distribution ratio, spinnor shares held
 
3 
 
Growth and value plan, incurred cost
$ 42 
$ 75 
 
Growth and value plan, cost incurred to date
 
 
$ 85 
Acquisitions and Divestitures (Acquisitions) (Details Textual) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended
Jun. 29, 2012
Jun. 29, 2012
DJI [Member]
Jun. 30, 2012
DJI [Member]
Minimum [Member]
Jun. 30, 2012
DJI [Member]
Maximum [Member]
Jun. 30, 2012
S&P/DJ Indices [Member]
Jun. 30, 2012
S&P/DJ Indices [Member]
Jun. 29, 2012
CGIS And CME Group [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Deferred tax liabilities, noncurrent
 
$ 216 
 
 
 
 
 
Percentage of interest in joint venture
73.00% 
 
 
 
 
 
27.00% 
Acquistiion-related costs
 
 
 
 
15 
15 
 
Fair value of business acquired
 
$ 792 
 
 
 
 
 
Fair value estimates of proportionate shares of contributed businesses, assumptions, discount rates
 
 
10.00% 
11.00% 
 
 
 
Fair value estimates of proportionate shares of contributed businesses, assumptions, long term growth rates
 
 
2.50% 
3.50% 
 
 
 
Acquisitions and Divestitures (Acquisitions) (Details) (DJI [Member], USD $)
In Millions, unless otherwise specified
Jun. 29, 2012
Consideration Transferred:
 
Total consideration transferred
$ 792 
Preliminary Purchase Price Allocation:
 
Current assets
82 
Goodwill
96 
Property and equipment
4 
Current liabilities
(23)
Total net assets
792 
Indices [Member]
 
Preliminary Purchase Price Allocation:
 
Other intangibles
633 
Fair Value of S&P Index [Member]
 
Consideration Transferred:
 
Fair value of contribution
571 
Fair Value of Noncontrolling interest of DJI [Member]
 
Consideration Transferred:
 
Fair value of contribution
$ 221 
Acquisitions and Divestitures (Divestitures) (Details Textual) (LinkedIn [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2011
Jun. 30, 2011
LinkedIn [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Pretax gain related to sale of business
$ 13 
$ 13 
Acquisitions and Divestitures (Divestitures) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Income Statement reclassified results of discontinued operations
 
 
 
 
 
Loss from discontinued operations, net of tax
$ 0 
$ 0 
$ 0 
$ (1)
 
Assets and liabilities reclassified as held for sale
 
 
 
 
 
Accounts receivable, net
1,102 
1,002 
1,102 
1,002 
1,045 
Other liabilities
378 
433 
378 
433 
422 
Broadcasting Group [Member]
 
 
 
 
 
Income Statement reclassified results of discontinued operations
 
 
 
 
 
Revenue
 
23 
 
44 
 
Costs and expenses
 
22 
 
44 
 
Loss before taxes on income
 
1 
 
0 
 
Provision for taxes on income
 
(1)
 
(1)
 
Loss from discontinued operations, net of tax
 
0 
 
(1)
 
Assets and liabilities reclassified as held for sale
 
 
 
 
 
Accounts receivable, net
 
19 
 
19 
 
Property and equipment, net
 
25 
 
25 
 
Other intangible assets, net
 
46 
 
46 
 
Other assets
 
8 
 
8 
 
Assets held for sale
 
98 
 
98 
 
Accounts payable and accrued expenses
 
7 
 
7 
 
Other liabilities
 
5 
 
5 
 
Liabilities held for sale
 
$ 12 
 
$ 12 
 
Supplementary Balance Sheet Data (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Supplementary Balance Sheet Data
 
 
 
Accounts receivable - allowance for doubtful accounts
$ 52 
$ 55 
$ 70 
Accounts receivable - allowance for sales returns
120 
187 
146 
Prepublication costs - accumulated amortization
1,120 
1,066 
955 
Property and equipment - accumulated depreciation
$ 1,006 
$ 1,066 
$ 1,056 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Fair Value Measurements (Textual) [Abstract]
 
 
 
Available-for-sale securities
$ 11 
$ 14 
$ 12 
Fair value of long-term borrowings
$ 1,300 
$ 1,300 
$ 1,300 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Income Taxes (Textual) [Abstract]
 
 
 
 
 
Effective tax rate
36.30% 
36.30% 
36.30% 
36.30% 
 
Effective tax rate, including discontinued operations
 
36.40% 
 
36.40% 
 
Unrecognized tax benefits interest on income taxes expense
$ 66 
$ 62 
$ 66 
$ 62 
$ 57 
Accrued interest and penalty related to unrecognized tax benefits included in income tax provision
$ 15 
$ 15 
$ 15 
$ 15 
$ 13 
Debt (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Debt Instrument [Line Items]
 
 
 
Total debt
$ 1,199 
$ 1,198 
$ 1,198 
Less: short-term debt including current maturities
400 
400 
0 
Long-term debt
799 
798 
1,198 
5.375% Senior Notes, due 2012 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total debt
400 
400 
400 
Debt (Textual) [Abstract]
 
 
 
Interest rate
5.375% 
5.375% 
5.375% 
Unamortized debt discount on senior notes
0.1 
 
 
5.9% Senior Notes, due 2017 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total debt
399 
399 
399 
Debt (Textual) [Abstract]
 
 
 
Interest rate
5.90% 
5.90% 
5.90% 
Unamortized debt discount on senior notes
0.5 
 
 
6.55% Senior Notes, due 2037 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total debt
399 
399 
399 
Debt (Textual) [Abstract]
 
 
 
Interest rate
6.55% 
6.55% 
6.55% 
Unamortized debt discount on senior notes
1.3 
 
 
Notes Payable [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total debt
$ 1 
$ 0 
$ 0 
(Commercial Paper Program) (Details) (USD $)
In Billions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Line of Credit Facility [Line Items]
 
Size of total commercial paper program
$ 1.2 
Commitment fee
15 to 35 basis points, depending on credit rating and currently pay a commitment fee of 20 basis points 
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, current percentage
0.20% 
Indebtedness to cash flow
4 
3 Year Facility [Member]
 
Line of Credit Facility [Line Items]
 
Size of total commercial paper program
$ 1.2 
Employee Benefits (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Retirement Plans [Member]
 
 
 
 
Components of net periodic cost for retirement plans and post-retirement plans
 
 
 
 
Service cost
$ (1)
$ 16 
$ 18 
$ 34 
Interest cost
23 
25 
46 
50 
Expected return on plan assets
(31)
(32)
(62)
(64)
Amortization of actuarial loss
8 
8 
16 
15 
Net periodic benefit cost
(1)
17 
18 
35 
Post-Retirement Plans [Member]
 
 
 
 
Components of net periodic cost for retirement plans and post-retirement plans
 
 
 
 
Service cost
0 
1 
1 
1 
Interest cost
2 
1 
3 
3 
Amortization of prior service credit
(1)
0 
(1)
0 
Net periodic benefit cost
$ 1 
$ 2 
$ 3 
$ 4 
Employee Benefits (Details Textual) (USD $)
In Millions, unless otherwise specified
6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2012
United Kingdom Retirement Plan [Member]
Jun. 30, 2012
United Kingdom Retirement Plan [Member]
Jun. 30, 2011
United Kingdom Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
Net periodic benefit cost
 
 
$ 1 
$ 2 
$ 2 
Employee Benefits (Textual) [Abstract]
 
 
 
 
 
Contribution towards retirement plans
29 
 
 
 
 
Expected contributions towards of retirement plans
15 
 
 
 
 
Decrease in pension benefit liabilities
 
129 
 
 
 
Decrease in accumulated other comprehensive loss after tax
 
$ 82 
 
 
 
Stock-Based Compensation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Stock-Based Compensation
 
 
 
 
Stock option expense
$ 2 
$ 6 
$ 8 
$ 12 
Restricted stock and unit awards expense
25 
17 
39 
29 
Total stock-based compensation expense
$ 27 
$ 23 
$ 47 
$ 41 
Stock-Based Compensation (Details Textual)
In Millions, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2012
Plans
Jun. 30, 2011
Dec. 31, 2011
Stock Based Compensation (Textual) [Abstract]
 
 
 
Number of employee stock ownership plans
2 
 
 
Common shares issued from exercise of stock option outstanding
0.7 
2.6 
4.4 
Equity (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Share repurchases
 
 
 
 
Average price paid per share
$ 0.00 
$ 40.10 
$ 0.00 
$ 38.96 
Total cash utilized
$ 0 
$ 177 
$ 0 
$ 300 
2011 Repurchase Program [Member]
 
 
 
 
Share repurchases
 
 
 
 
Total number of shares purchased
0.1 
0 
0.9 
0 
2007 Repurchase Program [Member]
 
 
 
 
Share repurchases
 
 
 
 
Total number of shares purchased
0 
4.4 
0 
7.7 
Equity (Details Textual) (USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Dec. 31, 2011
2007 Repurchase Program [Member]
Jun. 30, 2012
2011 Repurchase Program [Member]
Jun. 30, 2012
First ASR Agreement [Member]
Jun. 30, 2012
Second ASR Agreement [Member]
Mar. 31, 2012
Uncollared ASR Agreement [Member]
Dec. 31, 2011
Uncollared ASR Agreement [Member]
Jun. 30, 2012
Capped ASR Agreement [Member]
Dec. 31, 2011
Capped ASR Agreement [Member]
Equity (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
Stock repurchase program number of shares authorized to be repurchased
 
 
 
50,000,000 
 
 
 
 
 
 
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
 
 
0 
22,700,000 
 
 
 
 
 
 
Repurchase of additional shares
 
$ 500 
 
 
 
 
 
 
 
 
Repurchase of shares at a per share price
 
 
 
 
250 
250 
 
250 
 
250 
Percentage of VWAP of common stock
 
 
 
 
 
110.00% 
 
 
 
 
Shares received on initial delivery
 
 
 
 
 
 
 
5,000,000 
 
5,000,000 
Percentage of shares received on initial delivery
 
 
 
 
 
 
 
20.00% 
 
 
Shares hold back on initial delivery
 
 
 
 
 
 
 
$ 50 
 
 
Additional shares received
 
 
 
 
 
 
800,000 
 
100,000 
 
Additional repurchase program shares received
 
 
 
 
 
 
6,000,000 
 
5,000,000 
 
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 
 
 
 
 
 
 
 
 
 
Earnings Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Amount attributable to The McGraw-Hill Companies, Inc. common shareholders:
 
 
 
 
Income from continuing operations
$ 216 
$ 211 
$ 339 
$ 332 
Loss from discontinued operations, net of tax
0 
0 
0 
(1)
Net income attributable to The McGraw-Hill Companies, Inc.
$ 216 
$ 211 
$ 339 
$ 331 
Basic weighted-average number of common shares outstanding
279.7 
303.6 
278.9 
304.4 
Effect of stock options and other dilutive securities
5.6 
5.6 
5.6 
5.0 
Diluted weighted-average number of common shares outstanding
285.3 
309.2 
284.5 
309.4 
Basic EPS:
 
 
 
 
Income from continuing operations
$ 0.77 
$ 0.70 
$ 1.22 
$ 1.09 
Loss from discontinued operations, net of tax
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
Net income
$ 0.77 
$ 0.70 
$ 1.22 
$ 1.09 
Diluted EPS:
 
 
 
 
Income from continuing operations
$ 0.76 
$ 0.68 
$ 1.19 
$ 1.07 
Loss from discontinued operations, net of tax
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
Net income
$ 0.76 
$ 0.68 
$ 1.19 
$ 1.07 
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
3.8 
10.0 
4.0 
10.8 
Restructuring (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Restructuring Plan, 2011 [Member]
Positions
Jun. 30, 2012
Growth And Value Plan [Member]
Jun. 30, 2012
Restructuring Plan, 2006 [Member]
Restructuring (Textual) [Abstract]
 
 
 
 
Pre-tax restructuring charge
 
$ 66 
$ 5 
 
Workforce reduction, positions
 
800 
 
 
Restructuring charges paid
12 
 
 
 
Restructuring reserve, current
$ 37 
 
 
$ 3 
Segment and Related Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Segment information
 
 
 
 
Revenue
$ 1,547 
$ 1,557 
$ 2,878 
$ 2,818 
Operating Income (Loss)
365 
358 
586 
573 
S&P Ratings [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
483 
480 
949 
923 
Operating Income (Loss)
208 
213 
394 
403 
S&P Capital IQ/S&P Indices [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
366 
333 
719 
657 
Operating Income (Loss)
100 
98 
207 
194 
Commodities & Commercial [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
241 
222 
474 
429 
Operating Income (Loss)
71 
49 
135 
87 
McGraw-Hill Education [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
474 
537 
770 
839 
Operating Income (Loss)
57 
42 
(8)
(33)
Intersegment elimination [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
(17)
(15)
(34)
(30)
Operating Income (Loss)
0 
0 
0 
0 
Operating Segments [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
1,547 
1,557 
2,878 
2,818 
Operating Income (Loss)
436 
402 
728 
651 
General corporate expense [Member]
 
 
 
 
Segment information
 
 
 
 
Revenue
0 
0 
0 
0 
Operating Income (Loss)
$ (71)
$ (44)
$ (142)
$ (78)
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Commitments and Contingencies (Textual) [Abstract]
 
 
Deferred gain
$ 129 
$ 129 
Amortized Deferred Gain
3 
7 
Interest expense
2 
3 
S&P/DJ Indices [Member] |
CME Group [Member]
 
 
Related Party Transaction [Line Items]
 
 
Revenues earned under License Agreement with CME Group
$ 3