Statement of Income |
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Three Months Ended June 30, 2015 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 161 |
| | $ | 573 |
| | $ | 636 |
| | $ | (28 | ) | | $ | 1,342 |
| Expenses: | | | | | | | | | | Operating-related expenses | 21 |
| | 154 |
| | 259 |
| | (28 | ) | | 406 |
| Selling and general expenses | 1 |
| | 101 |
| | 230 |
| | — |
| | 332 |
| Depreciation | 10 |
| | 5 |
| | 7 |
| | — |
| | 22 |
| Amortization of intangibles | 1 |
| | — |
| | 10 |
| | — |
| | 11 |
| Total expenses | 33 |
| | 260 |
| | 506 |
| | (28 | ) | | 771 |
| Other income | — |
| | — |
| | (11 | ) | | — |
| | (11 | ) | Operating profit | 128 |
| | 313 |
| | 141 |
| | — |
| | 582 |
| Interest expense (income), net | 20 |
| | — |
| | (4 | ) | | — |
| | 16 |
| Non-operating intercompany transactions | 71 |
| | 59 |
| | (130 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | 37 |
| | 254 |
| | 275 |
| | — |
| | 566 |
| Provision for taxes on income | 11 |
| | 99 |
| | 75 |
| | — |
| | 185 |
| Equity in net income of subsidiaries | 338 |
| | 68 |
| | — |
| | (406 | ) | | — |
| Net income | $ | 364 |
| | $ | 223 |
| | $ | 200 |
| | $ | (406 | ) | | $ | 381 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (28 | ) | | (28 | ) | Net income attributable to McGraw Hill Financial, Inc. | $ | 364 |
| | $ | 223 |
| | $ | 200 |
| | $ | (434 | ) | | $ | 353 |
| Comprehensive income | $ | 384 |
| | $ | 222 |
| | $ | 262 |
| | $ | (405 | ) | | $ | 463 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Six Months Ended June 30, 2015 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 317 |
| | $ | 1,117 |
| | $ | 1,237 |
| | $ | (56 | ) | | $ | 2,615 |
| Expenses: | | | | | | | | | | Operating-related expenses | 53 |
| | 311 |
| | 504 |
| | (56 | ) | | 812 |
| Selling and general expenses | 67 |
| | 162 |
| | 436 |
| | — |
| | 665 |
| Depreciation | 19 |
| | 10 |
| | 14 |
| | — |
| | 43 |
| Amortization of intangibles | 2 |
| | — |
| | 21 |
| | — |
| | 23 |
| Total expenses | 141 |
| | 483 |
| | 975 |
| | (56 | ) | | 1,543 |
| Other income | — |
| | — |
| | (11 | ) | | — |
| | (11 | ) | Operating profit | 176 |
| | 634 |
| | 273 |
| | — |
| | 1,083 |
| Interest expense (income), net | 37 |
| | — |
| | (5 | ) | | — |
| | 32 |
| Non-operating intercompany transactions | 129 |
| | 91 |
| | (220 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | 10 |
| | 543 |
| | 498 |
| | — |
| | 1,051 |
| Provision for taxes on income | 17 |
| | 190 |
| | 133 |
| | — |
| | 340 |
| Equity in net income of subsidiaries | 703 |
| | 134 |
| | — |
| | (837 | ) | | — |
| Net income | $ | 696 |
| | $ | 487 |
| | $ | 365 |
| | $ | (837 | ) | | $ | 711 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (55 | ) | | (55 | ) | Net income attributable to McGraw Hill Financial, Inc. | $ | 696 |
| | $ | 487 |
| | $ | 365 |
| | $ | (892 | ) | | $ | 656 |
| Comprehensive income | $ | 710 |
| | $ | 486 |
| | $ | 357 |
| | $ | (839 | ) | | $ | 714 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Three Months Ended June 30, 2014 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 148 |
| | $ | 542 |
| | $ | 640 |
| | $ | (28 | ) | | $ | 1,302 |
| Expenses: | | | | | | | | | | Operating-related expenses | 21 |
| | 164 |
| | 250 |
| | (28 | ) | | 407 |
| Selling and general expenses | 27 |
| | 132 |
| | 217 |
| | — |
| | 376 |
| Depreciation | 11 |
| | 4 |
| | 7 |
| | — |
| | 22 |
| Amortization of intangibles | 1 |
| | — |
| | 11 |
| | — |
| | 12 |
| Total expenses | 60 |
| | 300 |
| | 485 |
| | (28 | ) | | 817 |
| Other loss | 3 |
| | — |
| | 6 |
| | — |
| | 9 |
| Operating profit | 85 |
| | 242 |
| | 149 |
| | — |
| | 476 |
| Interest expense (income), net | 15 |
| | — |
| | (1 | ) | | — |
| | 14 |
| Non-operating intercompany transactions | 15 |
| | 7 |
| | (22 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | 55 |
| | 235 |
| | 172 |
| | — |
| | 462 |
| Provision for taxes on income | 21 |
| | 86 |
| | 45 |
| | — |
| | 152 |
| Equity in net income of subsidiaries | 241 |
| | 58 |
| | — |
| | (299 | ) | | — |
| Income from continuing operations | 275 |
| | 207 |
| | 127 |
| | (299 | ) | | 310 |
| Income from discontinued operations, net of tax | 6 |
| | — |
| | — |
| | — |
| | 6 |
| Net income | $ | 281 |
| | $ | 207 |
| | $ | 127 |
| | $ | (299 | ) | | $ | 316 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (24 | ) | | (24 | ) | Net income attributable to McGraw Hill Financial, Inc. | $ | 281 |
| | $ | 207 |
| | $ | 127 |
| | $ | (323 | ) | | $ | 292 |
| Comprehensive income | $ | 240 |
| | $ | 208 |
| | $ | 146 |
| | $ | (302 | ) | | $ | 292 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Six Months Ended June 30, 2014 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 294 |
| | $ | 1,028 |
| | $ | 1,233 |
| | $ | (57 | ) | | $ | 2,498 |
| Expenses: | | | | | | | | | | Operating-related expenses | 40 |
| | 315 |
| | 505 |
| | (57 | ) | | 803 |
| Selling and general expenses | 92 |
| | 237 |
| | 395 |
| | — |
| | 724 |
| Depreciation | 20 |
| | 9 |
| | 13 |
| | — |
| | 42 |
| Amortization of intangibles | 2 |
| | — |
| | 22 |
| | — |
| | 24 |
| Total expenses | 154 |
| | 561 |
| | 935 |
| | (57 | ) | | 1,593 |
| Other loss | 3 |
| | — |
| | 6 |
| | — |
| | 9 |
| Operating profit | 137 |
| | 467 |
| | 292 |
| | — |
| | 896 |
| Interest expense (income), net | 31 |
| | — |
| | (3 | ) | | — |
| | 28 |
| Non-operating intercompany transactions | 74 |
| | 14 |
| | (88 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | 32 |
| | 453 |
| | 383 |
| | — |
| | 868 |
| Provision for taxes on income | 13 |
| | 173 |
| | 104 |
| | — |
| | 290 |
| Equity in net income of subsidiaries | 500 |
| | 124 |
| | — |
| | (624 | ) | | — |
| Income from continuing operations | 519 |
| | 404 |
| | 279 |
| | (624 | ) | | 578 |
| Income from discontinued operations, net of tax | 12 |
| | — |
| | — |
| | — |
| | 12 |
| Net income | $ | 531 |
| | $ | 404 |
| | $ | 279 |
| | $ | (624 | ) | | $ | 590 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (50 | ) | | (50 | ) | Net income attributable to McGraw Hill Financial, Inc. | $ | 531 |
| | $ | 404 |
| | $ | 279 |
| | $ | (674 | ) | | $ | 540 |
| Comprehensive income | $ | 515 |
| | $ | 380 |
| | $ | 305 |
| | $ | (628 | ) | | $ | 572 |
|
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Year Ended December 31, 2014 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 598 |
| | $ | 2,043 |
| | $ | 2,525 |
| | $ | (115 | ) | | $ | 5,051 |
| Expenses: | | | | | | | | | | Operating-related expenses | 78 |
| | 389 |
| | 1,275 |
| | (115 | ) | | 1,627 |
| Selling and general expenses | 296 |
| | 2,350 |
| | 522 |
| | — |
| | 3,168 |
| Depreciation | 41 |
| | 17 |
| | 28 |
| | — |
| | 86 |
| Amortization of intangibles | 4 |
| | — |
| | 44 |
| | — |
| | 48 |
| Total expenses | 419 |
| | 2,756 |
| | 1,869 |
| | (115 | ) | | 4,929 |
| Other loss | 3 |
| | — |
| | 6 |
| | — |
| | 9 |
| Operating profit (loss) | 176 |
| | (713 | ) | | 650 |
| | — |
| | 113 |
| Interest expense (income), net | 66 |
| | — |
| | (7 | ) | | — |
| | 59 |
| Non-operating intercompany transactions | 193 |
| | 38 |
| | (231 | ) | | — |
| | — |
| (Loss) income from continuing operations before taxes on income | (83 | ) | | (751 | ) | | 888 |
| | — |
| | 54 |
| (Benefit) provision for taxes on income | (22 | ) | | 16 |
| | 251 |
| | — |
| | 245 |
| Equity in net (loss) income of subsidiaries | (443 | ) | | 248 |
| | — |
| | 195 |
| | — |
| (Loss) income from continuing operations | (504 | ) | | (519 | ) | | 637 |
| | 195 |
| | (191 | ) | Discontinued operations, net of tax: | | | | | | | | | | Income from discontinued operations | 18 |
| | — |
| | — |
| | — |
| | 18 |
| Gain on sale of discontinued operations | 160 |
| | — |
| | — |
| | — |
| | 160 |
| Discontinued operations, net | 178 |
| | — |
| | — |
| | — |
| | 178 |
| Net (loss) income | $ | (326 | ) | | $ | (519 | ) | | $ | 637 |
| | $ | 195 |
| | (13 | ) | Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (102 | ) | | (102 | ) | Net (loss) income attributable to McGraw Hill Financial, Inc. | $ | (326 | ) | | $ | (519 | ) | | $ | 637 |
| | $ | 93 |
| | $ | (115 | ) | Comprehensive (loss) income | $ | (495 | ) | | $ | (544 | ) | | $ | 513 |
| | $ | 195 |
| | $ | (331 | ) |
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Year Ended December 31, 2013 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 570 |
| | $ | 1,931 |
| | $ | 2,306 |
| | $ | (105 | ) | | $ | 4,702 |
| Expenses: | | | | | | | | | | Operating-related expenses | 128 |
| | 556 |
| | 985 |
| | (105 | ) | | 1,564 |
| Selling and general expenses | 338 |
| | 532 |
| | 761 |
| | — |
| | 1,631 |
| Depreciation | 40 |
| | 19 |
| | 27 |
| | — |
| | 86 |
| Amortization of intangibles | 5 |
| | — |
| | 46 |
| | — |
| | 51 |
| Total expenses | 511 |
| | 1,107 |
| | 1,819 |
| | (105 | ) | | 3,332 |
| Other loss (income) | 25 |
| | 3 |
| | (16 | ) | | — |
| | 12 |
| Operating profit | 34 |
| | 821 |
| | 503 |
| | — |
| | 1,358 |
| Interest expense (income), net | 65 |
| | — |
| | (6 | ) | | — |
| | 59 |
| Non-operating intercompany transactions | 245 |
| | 66 |
| | (311 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | (276 | ) | | 755 |
| | 820 |
| | — |
| | 1,299 |
| (Benefit) provision for taxes on income | (121 | ) | | 283 |
| | 263 |
| | — |
| | 425 |
| Equity in net income of subsidiaries | 1,937 |
| | 197 |
| | — |
| | (2,134 | ) | | — |
| Income from continuing operations | 1,782 |
| | 669 |
| | 557 |
| | (2,134 | ) | | 874 |
| Discontinued operations, net of tax: | | | | | | | | | | Income (loss) from discontinued operations | 82 |
| | — |
| | (79 | ) | | — |
| | 3 |
| Gain (loss) on sale of discontinued operations | 644 |
| | — |
| | (55 | ) | | — |
| | 589 |
| Discontinued operations, net | 726 |
| | — |
| | (134 | ) | | — |
| | 592 |
| Net income | $ | 2,508 |
| | $ | 669 |
| | $ | 423 |
| | $ | (2,134 | ) | | $ | 1,466 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (91 | ) | | (91 | ) | Less: net loss from discontinued operations attributable to noncontrolling interests
| — |
| | — |
| | — |
| | 1 |
| | 1 |
| Net income attributable to McGraw Hill Financial, Inc. | $ | 2,508 |
| | $ | 669 |
| | $ | 423 |
| | $ | (2,224 | ) | | $ | 1,376 |
| Comprehensive income | $ | 2,773 |
| | $ | 669 |
| | $ | 452 |
| | $ | (2,106 | ) | | $ | 1,788 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Income | | Year Ended December 31, 2012 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Revenue | $ | 522 |
| | $ | 1,964 |
| | $ | 1,889 |
| | $ | (105 | ) | | $ | 4,270 |
| Expenses: | | | | | | | | | | Operating-related expenses | 83 |
| | 587 |
| | 868 |
| | (105 | ) | | 1,433 |
| Selling and general expenses | 360 |
| | 504 |
| | 714 |
| | — |
| | 1,578 |
| Depreciation | 45 |
| | 19 |
| | 29 |
| | — |
| | 93 |
| Amortization of intangibles | 6 |
| | — |
| | 42 |
| | — |
| | 48 |
| Total expenses | 494 |
| | 1,110 |
| | 1,653 |
| | (105 | ) | | 3,152 |
| Other income | (52 | ) | | — |
| | — |
| | — |
| | (52 | ) | Operating profit | 80 |
| | 854 |
| | 236 |
| | — |
| | 1,170 |
| Interest expense (income), net | 85 |
| | — |
| | (4 | ) | | — |
| | 81 |
| Non-operating intercompany transactions | 201 |
| | 11 |
| | (212 | ) | | — |
| | — |
| Income from continuing operations before taxes on income | (206 | ) | | 843 |
| | 452 |
| | — |
| | 1,089 |
| (Benefit) provision for taxes on income | (106 | ) | | 320 |
| | 174 |
| | — |
| | 388 |
| Equity in net income of subsidiaries | 2,713 |
| | 91 |
| | — |
| | (2,804 | ) | | — |
| Income from continuing operations | 2,613 |
| | 614 |
| | 278 |
| | (2,804 | ) | | 701 |
| Loss from discontinued operations | (147 | ) | | — |
| | (33 | ) | | (29 | ) | | (209 | ) | Net income | $ | 2,466 |
| | $ | 614 |
| | $ | 245 |
| | $ | (2,833 | ) | | $ | 492 |
| Less: net income from continuing operations attributable to noncontrolling interests | — |
| | — |
| | — |
| | (50 | ) | | (50 | ) | Less: net income from discontinued operations attributable to noncontrolling interests
| — |
| | — |
| | — |
| | (5 | ) | | (5 | ) | Net income attributable to McGraw Hill Financial, Inc. | $ | 2,466 |
| | $ | 614 |
| | $ | 245 |
| | $ | (2,888 | ) | | $ | 437 |
| Comprehensive income | $ | 2,338 |
| | $ | 638 |
| | $ | 262 |
| | $ | (2,839 | ) | | $ | 399 |
|
|
Balance Sheet |
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | June 30, 2015 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | ASSETS | | | | | | | | | | Current assets: | | | | | | | | | | Cash and equivalents | $ | 531 |
| | $ | — |
| | $ | 1,189 |
| | $ | — |
| | $ | 1,720 |
| Accounts receivable, net of allowance for doubtful accounts | 118 |
| | 318 |
| | 627 |
| | — |
| | 1,063 |
| Intercompany receivable
| 246 |
| | 1,114 |
| | 1,304 |
| | (2,664 | ) | | — |
| Deferred income taxes | 72 |
| | 173 |
| | (42 | ) | | — |
| | 203 |
| Prepaid and other current assets | 74 |
| | 30 |
| | 123 |
| | — |
| | 227 |
| Total current assets | 1,041 |
| | 1,635 |
| | 3,201 |
| | (2,664 | ) | | 3,213 |
| Property and equipment, net of accumulated depreciation | 113 |
| | 3 |
| | 92 |
| | — |
| | 208 |
| Goodwill | 107 |
| | 41 |
| | 1,226 |
| | 9 |
| | 1,383 |
| Other intangible assets, net | 12 |
| | — |
| | 968 |
| | (3 | ) | | 977 |
| Asset for pension benefits | — |
| | — |
| | 58 |
| | — |
| | 58 |
| Investments in subsidiaries | 2,516 |
| | 695 |
| | 7,227 |
| | (10,438 | ) | | — |
| Intercompany loans receivable | 17 |
| | 361 |
| | 1,816 |
| | (2,194 | ) | | — |
| Other non-current assets | 73 |
| | 20 |
| | 81 |
| | — |
| | 174 |
| Total assets | $ | 3,879 |
| | $ | 2,755 |
| | $ | 14,669 |
| | $ | (15,290 | ) | | $ | 6,013 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 53 |
| | $ | 46 |
| | $ | 82 |
| | $ | — |
| | $ | 181 |
| Intercompany payable | 1,280 |
| | 611 |
| | 772 |
| | (2,663 | ) | | — |
| Accrued compensation and contributions to retirement plans | 106 |
| | 53 |
| | 105 |
| | — |
| | 264 |
| Income taxes currently payable | — |
| | — |
| | 51 |
| | — |
| | 51 |
| Unearned revenue | 270 |
| | 600 |
| | 517 |
| | — |
| | 1,387 |
| Accrued legal and regulatory settlements | — |
| | 23 |
| | — |
| | — |
| | 23 |
| Other current liabilities | 156 |
| | 9 |
| | 169 |
| | — |
| | 334 |
| Total current liabilities | 1,865 |
| | 1,342 |
| | 1,696 |
| | (2,663 | ) | | 2,240 |
| Long-term debt | 1,494 |
| | — |
| | — |
| | — |
| | 1,494 |
| Intercompany loans payable | 22 |
| | — |
| | 2,173 |
| | (2,195 | ) | | — |
| Pension and postretirement benefits | 226 |
| | — |
| | 59 |
| | — |
| | 285 |
| Deferred income taxes | (226 | ) | | 52 |
| | 261 |
| | — |
| | 87 |
| Other non-current liabilities | 322 |
| | 9 |
| | (49 | ) | | — |
| | 282 |
| Total liabilities | 3,703 |
| | 1,403 |
| | 4,140 |
| | (4,858 | ) | | 4,388 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 810 |
| | 810 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,316 |
| | (2,316 | ) | | 412 |
| Additional paid-in capital | (201 | ) | | 1,166 |
| | 7,078 |
| | (7,608 | ) | | 435 |
| Retained income | 7,281 |
| | 186 |
| | 1,382 |
| | (1,411 | ) | | 7,438 |
| Accumulated other comprehensive loss | (305 | ) | | — |
| | (244 | ) | | 38 |
| | (511 | ) | Less: common stock in treasury | (7,011 | ) | | — |
| | (4 | ) | | 4 |
| | (7,011 | ) | Total equity - controlling interests | 176 |
| | 1,352 |
| | 10,528 |
| | (11,293 | ) | | 763 |
| Total equity - noncontrolling interests | — |
| | — |
| | 1 |
| | 51 |
| | 52 |
| Total equity | 176 |
| | 1,352 |
| | 10,529 |
| | (11,242 | ) | | 815 |
| Total liabilities and equity | $ | 3,879 |
| | $ | 2,755 |
| | $ | 14,669 |
| | $ | (15,290 | ) | | $ | 6,013 |
|
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | December 31, 2014 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | ASSETS | | | | | | | | | | Current assets: | | | | | | | | | | Cash and equivalents | $ | 1,402 |
| | $ | — |
| | $ | 1,095 |
| | $ | — |
| | $ | 2,497 |
| Accounts receivable, net of allowance for doubtful accounts | 120 |
| | 293 |
| | 519 |
| | — |
| | 932 |
| Intercompany receivable
| 525 |
| | 2,125 |
| | 1,998 |
| | (4,648 | ) | | — |
| Deferred income taxes | 72 |
| | 334 |
| | (43 | ) | | — |
| | 363 |
| Prepaid and other current assets | 80 |
| | 27 |
| | 67 |
| | — |
| | 174 |
| Total current assets | 2,199 |
| | 2,779 |
| | 3,636 |
| | (4,648 | ) | | 3,966 |
| Property and equipment, net of accumulated depreciation | 111 |
| | 5 |
| | 90 |
| | — |
| | 206 |
| Goodwill | 109 |
| | 41 |
| | 1,228 |
| | 9 |
| | 1,387 |
| Other intangible assets, net | 13 |
| | — |
| | 991 |
| | — |
| | 1,004 |
| Asset for pension benefits | — |
| | — |
| | 28 |
| | — |
| | 28 |
| Investments in subsidiaries | 1,258 |
| | 653 |
| | 7,125 |
| | (9,036 | ) | | — |
| Intercompany loans receivable | 19 |
| | 358 |
| | 1,595 |
| | (1,972 | ) | | — |
| Other non-current assets | 81 |
| | 25 |
| | 74 |
| | — |
| | 180 |
| Total assets | $ | 3,790 |
| | $ | 3,861 |
| | $ | 14,767 |
| | $ | (15,647 | ) | | $ | 6,771 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 59 |
| | $ | 45 |
| | $ | 87 |
| | $ | — |
| | $ | 191 |
| Intercompany payable | 2,566 |
| | 617 |
| | 1,376 |
| | (4,559 | ) | | — |
| Accrued compensation and contributions to retirement plans | 133 |
| | 121 |
| | 156 |
| | — |
| | 410 |
| Income taxes currently payable | 15 |
| | 1 |
| | 16 |
| | — |
| | 32 |
| Unearned revenue | 259 |
| | 585 |
| | 479 |
| | — |
| | 1,323 |
| Accrued legal and regulatory settlements | — |
| | 1,609 |
| | — |
| | — |
| | 1,609 |
| Other current liabilities | 194 |
| | — |
| | 208 |
| | — |
| | 402 |
| Total current liabilities | 3,226 |
| | 2,978 |
| | 2,322 |
| | (4,559 | ) | | 3,967 |
| Long-term debt | 799 |
| | — |
| | — |
| | — |
| | 799 |
| Intercompany loans payable | 109 |
| | — |
| | 1,952 |
| | (2,061 | ) | | — |
| Pension and postretirement benefits | 272 |
| | — |
| | 61 |
| | — |
| | 333 |
| Deferred income taxes | (245 | ) | | 51 |
| | 250 |
| | — |
| | 56 |
| Other non-current liabilities | 219 |
| | 8 |
| | 40 |
| | — |
| | 267 |
| Total liabilities | 4,380 |
| | 3,037 |
| | 4,625 |
| | (6,620 | ) | | 5,422 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 810 |
| | 810 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,316 |
| | (2,316 | ) | | 412 |
| Additional paid-in capital | (116 | ) | | 1,153 |
| | 7,016 |
| | (7,560 | ) | | 493 |
| Retained income | 6,282 |
| | (329 | ) | | 1,053 |
| | (60 | ) | | 6,946 |
| Accumulated other comprehensive loss | (319 | ) | | — |
| | (236 | ) | | 41 |
| | (514 | ) | Less: common stock in treasury | (6,849 | ) | | — |
| | (7 | ) | | 7 |
| | (6,849 | ) | Total equity - controlling interests | (590 | ) | | 824 |
| | 10,142 |
| | (9,888 | ) | | 488 |
| Total equity - noncontrolling interests | — |
| | — |
| | — |
| | 51 |
| | 51 |
| Total equity | (590 | ) | | 824 |
| | 10,142 |
| | (9,837 | ) | | 539 |
| Total liabilities and equity | $ | 3,790 |
| | $ | 3,861 |
| | $ | 14,767 |
| | $ | (15,647 | ) | | $ | 6,771 |
|
|
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | December 31, 2014 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | ASSETS | | | | | | | | | | Current assets: | | | | | | | | | | Cash and equivalents | $ | 1,402 |
| | $ | — |
| | $ | 1,095 |
| | $ | — |
| | $ | 2,497 |
| Accounts receivable, net of allowance for doubtful accounts | 120 |
| | 293 |
| | 519 |
| | — |
| | 932 |
| Intercompany receivable
| 525 |
| | 2,125 |
| | 1,998 |
| | (4,648 | ) | | — |
| Deferred income taxes | 72 |
| | 334 |
| | (43 | ) | | — |
| | 363 |
| Prepaid and other current assets | 80 |
| | 27 |
| | 67 |
| | — |
| | 174 |
| Total current assets | 2,199 |
| | 2,779 |
| | 3,636 |
| | (4,648 | ) | | 3,966 |
| Property and equipment, net of accumulated depreciation | 111 |
| | 5 |
| | 90 |
| | — |
| | 206 |
| Goodwill | 109 |
| | 41 |
| | 1,228 |
| | 9 |
| | 1,387 |
| Other intangible assets, net | 13 |
| | — |
| | 991 |
| | — |
| | 1,004 |
| Asset for pension benefits | — |
| | — |
| | 28 |
| | — |
| | 28 |
| Investments in subsidiaries | 1,258 |
| | 653 |
| | 7,125 |
| | (9,036 | ) | | — |
| Intercompany loans receivable | 19 |
| | 358 |
| | 1,595 |
| | (1,972 | ) | | — |
| Other non-current assets | 81 |
| | 25 |
| | 74 |
| | — |
| | 180 |
| Total assets | $ | 3,790 |
| | $ | 3,861 |
| | $ | 14,767 |
| | $ | (15,647 | ) | | $ | 6,771 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 59 |
| | $ | 45 |
| | $ | 87 |
| | $ | — |
| | $ | 191 |
| Intercompany payable | 2,566 |
| | 617 |
| | 1,376 |
| | (4,559 | ) | | — |
| Accrued compensation and contributions to retirement plans | 133 |
| | 121 |
| | 156 |
| | — |
| | 410 |
| Income taxes currently payable | 15 |
| | 1 |
| | 16 |
| | — |
| | 32 |
| Unearned revenue | 259 |
| | 585 |
| | 479 |
| | — |
| | 1,323 |
| Accrued legal and regulatory settlements | — |
| | 1,609 |
| | — |
| | — |
| | 1,609 |
| Other current liabilities | 194 |
| | — |
| | 208 |
| | — |
| | 402 |
| Total current liabilities | 3,226 |
| | 2,978 |
| | 2,322 |
| | (4,559 | ) | | 3,967 |
| Long-term debt | 799 |
| | — |
| | — |
| | — |
| | 799 |
| Intercompany loans payable | 109 |
| | — |
| | 1,952 |
| | (2,061 | ) | | — |
| Pension and postretirement benefits | 272 |
| | — |
| | 61 |
| | — |
| | 333 |
| Deferred income taxes | (245 | ) | | 51 |
| | 250 |
| | — |
| | 56 |
| Other non-current liabilities | 219 |
| | 8 |
| | 40 |
| | — |
| | 267 |
| Total liabilities | 4,380 |
| | 3,037 |
| | 4,625 |
| | (6,620 | ) | | 5,422 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 810 |
| | 810 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,316 |
| | (2,316 | ) | | 412 |
| Additional paid-in capital | (116 | ) | | 1,153 |
| | 7,016 |
| | (7,560 | ) | | 493 |
| Retained income | 6,282 |
| | (329 | ) | | 1,053 |
| | (60 | ) | | 6,946 |
| Accumulated other comprehensive loss | (319 | ) | | — |
| | (236 | ) | | 41 |
| | (514 | ) | Less: common stock in treasury | (6,849 | ) | | — |
| | (7 | ) | | 7 |
| | (6,849 | ) | Total equity - controlling interests | (590 | ) | | 824 |
| | 10,142 |
| | (9,888 | ) | | 488 |
| Total equity - noncontrolling interests | — |
| | — |
| | — |
| | 51 |
| | 51 |
| Total equity | (590 | ) | | 824 |
| | 10,142 |
| | (9,837 | ) | | 539 |
| Total liabilities and equity | $ | 3,790 |
| | $ | 3,861 |
| | $ | 14,767 |
| | $ | (15,647 | ) | | $ | 6,771 |
|
| | | | | | | | | | | | | | | | | | | | | | Balance Sheet | | December 31, 2013 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | ASSETS | | | | | | | | | | Current assets: | | | | | | | | | | Cash and equivalents | $ | 685 |
| | $ | — |
| | $ | 857 |
| | $ | — |
| | $ | 1,542 |
| Accounts receivable, net of allowance for doubtful accounts | 108 |
| | 345 |
| | 496 |
| | — |
| | 949 |
| Intercompany receivable | 234 |
| | 1,394 |
| | 2,002 |
| | (3,630 | ) | | — |
| Deferred income taxes | 55 |
| | 34 |
| | 19 |
| | — |
| | 108 |
| Prepaid and other current assets | 161 |
| | 1 |
| | 83 |
| | — |
| | 245 |
| Assets held for sale | 97 |
| | — |
| | — |
| | — |
| | 97 |
| Total current assets | 1,340 |
| | 1,774 |
| | 3,457 |
| | (3,630 | ) | | 2,941 |
| Property and equipment, net of accumulated depreciation | 135 |
| | 7 |
| | 107 |
| | — |
| | 249 |
| Goodwill | 138 |
| | 41 |
| | 1,221 |
| | 9 |
| | 1,409 |
| Other intangible assets, net | 17 |
| | — |
| | 1,013 |
| | 3 |
| | 1,033 |
| Asset for pension benefits | 232 |
| | — |
| | 29 |
| | — |
| | 261 |
| Investments in subsidiaries | 2,215 |
| | 646 |
| | 6,114 |
| | (8,975 | ) | | — |
| Intercompany loans receivable | 40 |
| | 344 |
| | (20 | ) | | (364 | ) | | — |
| Other non-current assets | 92 |
| | 27 |
| | 49 |
| | — |
| | 168 |
| Total assets | $ | 4,209 |
| | $ | 2,839 |
| | $ | 11,970 |
| | $ | (12,957 | ) | | $ | 6,061 |
| LIABILITIES AND EQUITY | | | | | | | | | | Current liabilities: | | | | | | | | | | Accounts payable | $ | 52 |
| | $ | 56 |
| | $ | 102 |
| | $ | — |
| | $ | 210 |
| Intercompany payable | 1,665 |
| | 391 |
| | 1,484 |
| | (3,540 | ) | | — |
| Accrued compensation and contributions to retirement plans | 145 |
| | 119 |
| | 159 |
| | — |
| | 423 |
| Income taxes currently payable | 3 |
| | — |
| | 12 |
| | — |
| | 15 |
| Unearned revenue | 251 |
| | 559 |
| | 458 |
| | — |
| | 1,268 |
| Other current liabilities | 227 |
| | — |
| | 175 |
| | — |
| | 402 |
| Liabilities held for sale | 54 |
| | — |
| | — |
| | — |
| | 54 |
| Total current liabilities | 2,397 |
| | 1,125 |
| | 2,390 |
| | (3,540 | ) | | 2,372 |
| Long-term debt | 799 |
| | — |
| | — |
| | — |
| | 799 |
| Intercompany loans payable | 89 |
| | — |
| | 363 |
| | (452 | ) | | — |
| Pension and postretirement benefits | 220 |
| | — |
| | 44 |
| | — |
| | 264 |
| Deferred income taxes | (155 | ) | | 24 |
| | 337 |
| | — |
| | 206 |
| Other non-current liabilities | 235 |
| | 3 |
| | 29 |
| | (1 | ) | | 266 |
| Total liabilities | 3,585 |
| | 1,152 |
| | 3,163 |
| | (3,993 | ) | | 3,907 |
| Redeemable noncontrolling interest | — |
| | — |
| | — |
| | 810 |
| | 810 |
| Equity: | | | | | | | | | | Common stock | 412 |
| | — |
| | 2,305 |
| | (2,305 | ) | | 412 |
| Additional paid-in capital | (87 | ) | | 1,121 |
| | 7,099 |
| | (7,686 | ) | | 447 |
| Retained income | 7,195 |
| | 542 |
| | (462 | ) | | 109 |
| | 7,384 |
| Accumulated other comprehensive loss | (150 | ) | | 24 |
| | (111 | ) | | 41 |
| | (196 | ) | Less: common stock in treasury | (6,746 | ) | | — |
| | (24 | ) | | 24 |
| | (6,746 | ) | Total equity - controlling interests | 624 |
| | 1,687 |
| | 8,807 |
| | (9,817 | ) | | 1,301 |
| Total equity - noncontrolling interests | — |
| | — |
| | — |
| | 43 |
| | 43 |
| Total equity | 624 |
| | 1,687 |
| | 8,807 |
| | (9,774 | ) | | 1,344 |
| Total liabilities and equity | $ | 4,209 |
| | $ | 2,839 |
| | $ | 11,970 |
| | $ | (12,957 | ) | | $ | 6,061 |
|
|
Statement of Cash Flows |
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Six Months Ended June 30, 2015 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Operating Activities: | | | | | | | | | | Net income | $ | 696 |
| | $ | 487 |
| | $ | 365 |
| | $ | (837 | ) | | $ | 711 |
| Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations: | | | | | | | | | | Depreciation | 19 |
| | 10 |
| | 14 |
| | — |
| | 43 |
| Amortization of intangibles | 2 |
| | — |
| | 21 |
| | — |
| | 23 |
| Provision for losses on accounts receivable | — |
| | (2 | ) | | 6 |
| | — |
| | 4 |
| Deferred income taxes | (138 | ) | | 161 |
| | 143 |
| | — |
| | 166 |
| Stock-based compensation | 11 |
| | 11 |
| | 15 |
| | — |
| | 37 |
| Other | 6 |
| | 10 |
| | 6 |
| | — |
| | 22 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | 1 |
| | (23 | ) | | (114 | ) | | — |
| | (136 | ) | Prepaid and current assets | 32 |
| | (3 | ) | | (53 | ) | | — |
| | (24 | ) | Accounts payable and accrued expenses | (99 | ) | | (43 | ) | | (115 | ) | | — |
| | (257 | ) | Unearned revenue | 11 |
| | 15 |
| | 45 |
| | — |
| | 71 |
| Accrued legal and regulatory settlements | — |
| | (1,609 | ) | | — |
| | — |
| | (1,609 | ) | Other current liabilities | (31 | ) | | (3 | ) | | (2 | ) | | — |
| | (36 | ) | Net change in prepaid/accrued income taxes | 108 |
| | — |
| | 11 |
| | — |
| | 119 |
| Net change in other assets and liabilities | 62 |
| | 3 |
| | (96 | ) | | — |
| | (31 | ) | Cash provided by (used for) operating activities from continuing operations | 680 |
| | (986 | ) | | 246 |
| | (837 | ) | | (897 | ) | Investing Activities: | | | | | | | | | | Capital expenditures | (18 | ) | | (4 | ) | | (20 | ) | | — |
| | (42 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (2 | ) | | — |
| | (2 | ) | Proceeds from dispositions | — |
| | — |
| | 14 |
| | — |
| | 14 |
| Changes in short-term investments | — |
| | — |
| | (7 | ) | | — |
| | (7 | ) | Cash used for investing activities from continuing operations | (18 | ) | | (4 | ) | | (15 | ) | | — |
| | (37 | ) | Financing Activities: | | | | | | | | | | Proceeds from issuance of senior notes, net | 690 |
| | — |
| | — |
| | — |
| | 690 |
| Dividends paid to shareholders | (185 | ) | | — |
| | — |
| | — |
| | (185 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (49 | ) | | — |
| | (49 | ) | Repurchase of treasury shares | (274 | ) | | — |
| | — |
| | — |
| | (274 | ) | Exercise of stock options | 71 |
| | — |
| | 2 |
| | — |
| | 73 |
| Excess tax benefits from share-based payments | 38 |
| | — |
| | — |
| | — |
| | 38 |
| Intercompany financing activities | (1,870 | ) | | 990 |
| | 43 |
| | 837 |
| | — |
| Cash (used for) provided by financing activities from continuing operations | (1,530 | ) | | 990 |
| | (4 | ) | | 837 |
| | 293 |
| Effect of exchange rate changes on cash from continuing operations | (3 | ) | | — |
| | (4 | ) | | — |
| | (7 | ) | Cash (used for) provided by continuing operations | (871 | ) | | — |
| | 223 |
| | — |
| | (648 | ) | Discontinued Operations: | | | | | | | | | | Cash used for operating activities | — |
| | — |
| | (129 | ) | | — |
| | (129 | ) | Cash used for discontinued operations | — |
| | — |
| | (129 | ) | | — |
| | (129 | ) | Net change in cash and equivalents | (871 | ) | | — |
| | 94 |
| | — |
| | (777 | ) | Cash and equivalents at beginning of period | 1,402 |
| | — |
| | 1,095 |
| | — |
| | 2,497 |
| Cash and equivalents at end of period | $ | 531 |
| | $ | — |
| | $ | 1,189 |
| | $ | — |
| | $ | 1,720 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Six Months Ended June 30, 2014 | | (Unaudited) | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Operating Activities: | | | | | | | | | | Net income | $ | 531 |
| | $ | 404 |
| | $ | 279 |
| | $ | (624 | ) | | $ | 590 |
| Less: discontinued operations, net | 12 |
| | — |
| | — |
| | — |
| | 12 |
| Income from continuing operations | 519 |
| | 404 |
| | 279 |
| | (624 | ) | | 578 |
| Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations: | | | | | | | | | | Depreciation | 20 |
| | 9 |
| | 13 |
| | — |
| | 42 |
| Amortization of intangibles | 2 |
| | — |
| | 22 |
| | — |
| | 24 |
| Provision for losses on accounts receivable | (1 | ) | | (3 | ) | | 4 |
| | — |
| | — |
| Deferred income taxes | — |
| | — |
| | 2 |
| | — |
| | 2 |
| Stock-based compensation | 16 |
| | 15 |
| | 16 |
| | — |
| | 47 |
| Other | (3 | ) | | — |
| | 11 |
| | — |
| | 8 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | 1 |
| | 41 |
| | (53 | ) | | — |
| | (11 | ) | Prepaid and current assets | (11 | ) | | (4 | ) | | 4 |
| | — |
| | (11 | ) | Accounts payable and accrued expenses | (125 | ) | | (110 | ) | | (13 | ) | | — |
| | (248 | ) | Unearned revenue | (12 | ) | | (3 | ) | | 30 |
| | — |
| | 15 |
| Other current liabilities | (34 | ) | | (8 | ) | | (27 | ) | | — |
| | (69 | ) | Net change in prepaid/accrued income taxes | 111 |
| | 3 |
| | (3 | ) | | — |
| | 111 |
| Net change in other assets and liabilities | (10 | ) | | 2 |
| | (34 | ) | | — |
| | (42 | ) | Cash provided by operating activities from continuing operations | 473 |
| | 346 |
| | 251 |
| | (624 | ) | | 446 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (9 | ) | | (9 | ) | | (19 | ) | | — |
| | (37 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (16 | ) | | — |
| | (16 | ) | Changes in short-term investments | — |
| | — |
| | 1 |
| | — |
| | 1 |
| Cash used for investing activities from continuing operations | (9 | ) | | (9 | ) | | (34 | ) | | — |
| | (52 | ) | Financing Activities: | | | | | | | | | | Dividends paid to shareholders | (164 | ) | | — |
| | — |
| | — |
| | (164 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (30 | ) | | — |
| | (30 | ) | Contingent consideration payments | — |
| | — |
| | (11 | ) | | — |
| | (11 | ) | Repurchase of treasury shares | (362 | ) | | — |
| | — |
| | — |
| | (362 | ) | Exercise of stock options | 130 |
| | — |
| | 3 |
| | — |
| | 133 |
| Excess tax benefits from share-based payments | 82 |
| | — |
| | — |
| | — |
| | 82 |
| Intercompany financing activities | (200 | ) | | (337 | ) | | (87 | ) | | 624 |
| | — |
| Cash used for financing activities from continuing operations | (514 | ) | | (337 | ) | | (125 | ) | | 624 |
| | (352 | ) | Effect of exchange rate changes on cash from continuing operations | — |
| | — |
| | 19 |
| | — |
| | 19 |
| Cash (used for) provided by continuing operations | (50 | ) | | — |
| | 111 |
| | — |
| | 61 |
| Discontinued Operations: | | | | | | | | | | Cash provided by operating activities | 14 |
| | — |
| | — |
| | — |
| | 14 |
| Cash provided by discontinued operations | 14 |
| | — |
| | — |
| | — |
| | 14 |
| Net change in cash and equivalents | (36 | ) | | — |
| | 111 |
| | — |
| | 75 |
| Cash and equivalents at beginning of period | 685 |
| | — |
| | 857 |
| | — |
| | 1,542 |
| Cash and equivalents at end of period | $ | 649 |
| | $ | — |
| | $ | 968 |
| | $ | — |
| | $ | 1,617 |
|
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Year Ended December 31, 2014 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Operating Activities: | | | | | | | | | | Net (loss) income | $ | (326 | ) | | $ | (519 | ) | | $ | 637 |
| | $ | 195 |
| | $ | (13 | ) | Less: discontinued operations, net | 178 |
| | — |
| | — |
| | — |
| | 178 |
| (Loss) income from continuing operations | (504 | ) | | (519 | ) | | 637 |
| | 195 |
| | (191 | ) | Adjustments to reconcile (loss) income from continuing operations to cash (used for) provided by operating activities from continuing operations: | | | | | | | | | | Depreciation | 41 |
| | 17 |
| | 28 |
| | — |
| | 86 |
| Amortization of intangibles | 4 |
| | — |
| | 44 |
| | — |
| | 48 |
| Provision for losses on accounts receivable | — |
| | 5 |
| | 6 |
| | — |
| | 11 |
| Deferred income taxes | 42 |
| | (272 | ) | | (15 | ) | | — |
| | (245 | ) | Stock-based compensation | 31 |
| | 34 |
| | 35 |
| | — |
| | 100 |
| Accrued legal and regulatory settlements | — |
| | 1,587 |
| | — |
| | — |
| | 1,587 |
| Other | 21 |
| | 39 |
| | 20 |
| | — |
| | 80 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | (11 | ) | | 47 |
| | (45 | ) | | — |
| | (9 | ) | Prepaid and current assets | (42 | ) | | (17 | ) | | 52 |
| | — |
| | (7 | ) | Accounts payable and accrued expenses | (83 | ) | | (47 | ) | | — |
| | — |
| | (130 | ) | Unearned revenue | 8 |
| | 26 |
| | 44 |
| | — |
| | 78 |
| Other current liabilities | (55 | ) | | 10 |
| | (6 | ) | | — |
| | (51 | ) | Net change in prepaid/accrued income taxes | 13 |
| | 3 |
| | (109 | ) | | — |
| | (93 | ) | Net change in other assets and liabilities | (117 | ) | | 5 |
| | 57 |
| | — |
| | (55 | ) | Cash (used for) provided by operating activities from continuing operations | (652 | ) | | 918 |
| | 748 |
| | 195 |
| | 1,209 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (26 | ) | | (14 | ) | | (52 | ) | | — |
| | (92 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (71 | ) | | — |
| | (71 | ) | Proceeds from dispositions | 63 |
| | — |
| | 20 |
| | — |
| | 83 |
| Changes in short-term investments | — |
| | — |
| | 15 |
| | — |
| | 15 |
| Cash provided by (used for) investing activities from continuing operations | 37 |
| | (14 | ) | | (88 | ) | | — |
| | (65 | ) | Financing Activities: | | | | | | | | | | Dividends paid to shareholders | (326 | ) | | — |
| | — |
| | — |
| | (326 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (84 | ) | | — |
| | (84 | ) | Repurchase of treasury shares | (362 | ) | | — |
| | — |
| | — |
| | (362 | ) | Exercise of stock options | 184 |
| | — |
| | 9 |
| | — |
| | 193 |
| Contingent payments | — |
| | — |
| | (11 | ) | | — |
| | (11 | ) | Excess tax benefits from share-based payments | 128 |
| | — |
| | — |
| | — |
| | 128 |
| Intercompany financing activities | 1,367 |
| | (904 | ) | | (268 | ) | | (195 | ) | | — |
| Cash provided by (used for) financing activities from continuing operations | 991 |
| | (904 | ) | | (354 | ) | | (195 | ) | | (462 | ) | Effect of exchange rate changes on cash from continuing operations | 3 |
| | — |
| | (68 | ) | | — |
| | (65 | ) | Cash provided by continuing operations | 379 |
| | — |
| | 238 |
| | — |
| | 617 |
| Discontinued Operations: | | | | | | | | | | Cash provided by operating activities | 18 |
| | — |
| | — |
| | — |
| | 18 |
| Cash provided by investing activities | 320 |
| | — |
| | — |
| | — |
| | 320 |
| Cash provided by discontinued operations | 338 |
| | — |
| | — |
| | — |
| | 338 |
| Net change in cash and equivalents | 717 |
| | — |
| | 238 |
| | — |
| | 955 |
| Cash and equivalents at beginning of year | 685 |
| | — |
| | 857 |
| | — |
| | 1,542 |
| Cash and equivalents at end of year | $ | 1,402 |
| | $ | — |
| | $ | 1,095 |
| | $ | — |
| | $ | 2,497 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Year Ended December 31, 2013 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Operating Activities: | | | | | | | | | | Net income | $ | 2,508 |
| | $ | 669 |
| | $ | 423 |
| | $ | (2,134 | ) | | $ | 1,466 |
| Less: discontinued operations, net | 726 |
| | — |
| | (134 | ) | | — |
| | 592 |
| Income from continuing operations | 1,782 |
| | 669 |
| | 557 |
| | (2,134 | ) | | 874 |
| Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations: | | | | | | | | | | Depreciation | 40 |
| | 19 |
| | 27 |
| | — |
| | 86 |
| Amortization of intangibles | 5 |
| | — |
| | 46 |
| | — |
| | 51 |
| Provision for losses on accounts receivable | 1 |
| | 7 |
| | 14 |
| | — |
| | 22 |
| Deferred income taxes | 39 |
| | — |
| | 4 |
| | — |
| | 43 |
| Stock-based compensation | 35 |
| | 33 |
| | 28 |
| | — |
| | 96 |
| Accrued legal and regulatory settlements | — |
| | — |
| | — |
| | — |
| | — |
| Other | 68 |
| | 10 |
| | 18 |
| | — |
| | 96 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | (2 | ) | | (4 | ) | | (29 | ) | | — |
| | (35 | ) | Prepaid and current assets | (14 | ) | | (7 | ) | | (8 | ) | | — |
| | (29 | ) | Accounts payable and accrued expenses | (120 | ) | | 18 |
| | 8 |
| | — |
| | (94 | ) | Unearned revenue | 17 |
| | 43 |
| | 49 |
| | — |
| | 109 |
| Other current liabilities | (43 | ) | | (24 | ) | | (22 | ) | | — |
| | (89 | ) | Net change in prepaid/accrued income taxes | (265 | ) | | (3 | ) | | 30 |
| | — |
| | (238 | ) | Net change in other assets and liabilities | (190 | ) | | 84 |
| | (4 | ) | | — |
| | (110 | ) | Cash provided by operating activities from continuing operations | 1,353 |
| | 845 |
| | 718 |
| | (2,134 | ) | | 782 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (61 | ) | | (19 | ) | | (37 | ) | | — |
| | (117 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (47 | ) | | — |
| | (47 | ) | Proceeds from dispositions | 35 |
| | — |
| | 16 |
| | — |
| | 51 |
| Changes in short-term investments | — |
| | — |
| | (17 | ) | | — |
| | (17 | ) | Cash used for investing activities from continuing operations | (26 | ) | | (19 | ) | | (85 | ) | | — |
| | (130 | ) | Financing Activities: | | | | | | | | | | Payments on short-term debt | (457 | ) | | — |
| | — |
| | — |
| | (457 | ) | Dividends paid to shareholders | (308 | ) | | — |
| | — |
| | — |
| | (308 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (75 | ) | | — |
| | (75 | ) | Repurchase of treasury shares | (978 | ) | | — |
| | — |
| | — |
| | (978 | ) | Exercise of stock options | 254 |
| | — |
| | 4 |
| | — |
| | 258 |
| Contingent payments | — |
| | — |
| | (12 | ) | | — |
| | (12 | ) | Purchase of additional CRISIL shares | — |
| | — |
| | (214 | ) | | — |
| | (214 | ) | Excess tax benefits from share-based payments | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Intercompany financing activities | (43 | ) | | (826 | ) | | (1,265 | ) | | 2,134 |
| | — |
| Cash used for financing activities from continuing operations | (1,489 | ) | | (826 | ) | | (1,562 | ) | | 2,134 |
| | (1,743 | ) | Effect of exchange rate changes on cash from continuing operations | 8 |
| | — |
| | (9 | ) | | — |
| | (1 | ) | Cash used for continuing operations | (154 | ) | | — |
| | (938 | ) | | — |
| | (1,092 | ) | Discontinued Operations: | | | | | | | | | | Cash provided by (used for) operating activities | 720 |
| | — |
| | (951 | ) | | — |
| | (231 | ) | Cash provided by investing activities | — |
| | — |
| | 2,129 |
| | — |
| | 2,129 |
| Cash used for financing activities | — |
| | — |
| | (25 | ) | | — |
| | (25 | ) | Effect of exchange rate changes on cash | — |
| | — |
| | 1 |
| | — |
| | 1 |
| Cash provided by discontinued operations | 720 |
| | — |
| | 1,154 |
| | — |
| | 1,874 |
| Net change in cash and equivalents | 566 |
| | — |
| | 216 |
| | — |
| | 782 |
| Cash and equivalents at beginning of year | 119 |
| | — |
| | 641 |
| | — |
| | 760 |
| Cash and equivalents at end of year | $ | 685 |
| | $ | — |
| | $ | 857 |
| | $ | — |
| | $ | 1,542 |
|
| | | | | | | | | | | | | | | | | | | | | | Statement of Cash Flows | | Year Ended December 31, 2012 | (in millions) | McGraw Hill Financial, Inc. | | Standard & Poor's Financial Services LLC | | Non-Guarantor Subsidiaries | | Eliminations | | McGraw Hill Financial Inc. Consolidated | Operating Activities: | | | | | | | | | | Net income | $ | 2,466 |
| | $ | 614 |
| | $ | 245 |
| | $ | (2,833 | ) | | $ | 492 |
| Less: discontinued operations, net | (147 | ) | | — |
| | (33 | ) | | (29 | ) | | (209 | ) | Income from continuing operations | 2,613 |
| | 614 |
| | 278 |
| | (2,804 | ) | | 701 |
| Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations: | | | | | | | | | | Depreciation | 45 |
| | 19 |
| | 29 |
| | — |
| | 93 |
| Amortization of intangibles | 6 |
| | — |
| | 42 |
| | — |
| | 48 |
| Provision for losses on accounts receivable | 1 |
| | 16 |
| | 15 |
| | — |
| | 32 |
| Deferred income taxes | 100 |
| | (41 | ) | | (6 | ) | | — |
| | 53 |
| Stock-based compensation | 21 |
| | 32 |
| | 37 |
| | — |
| | 90 |
| Accrued legal and regulatory settlements | — |
| | — |
| | — |
| | — |
| | — |
| Other | (16 | ) | | 23 |
| | (4 | ) | | — |
| | 3 |
| Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | | | | | | | | | | Accounts receivable | 64 |
| | (53 | ) | | (261 | ) | | — |
| | (250 | ) | Prepaid and current assets | — |
| | (18 | ) | | 21 |
| | — |
| | 3 |
| Accounts payable and accrued expenses | 53 |
| | (71 | ) | | 91 |
| | — |
| | 73 |
| Unearned revenue | 11 |
| | (29 | ) | | 41 |
| | — |
| | 23 |
| Other current liabilities | (29 | ) | | (21 | ) | | (18 | ) | | — |
| | (68 | ) | Net change in prepaid/accrued income taxes | 135 |
| | — |
| | (16 | ) | | — |
| | 119 |
| Net change in other assets and liabilities | (144 | ) | | 8 |
| | (54 | ) | | — |
| | (190 | ) | Cash provided by operating activities from continuing operations | 2,860 |
| | 479 |
| | 195 |
| | (2,804 | ) | | 730 |
| Investing Activities: | | | | | | | | | | Capital expenditures | (50 | ) | | (23 | ) | | (23 | ) | | — |
| | (96 | ) | Acquisitions, net of cash acquired | — |
| | — |
| | (177 | ) | | — |
| | (177 | ) | Changes in short-term investments | — |
| | — |
| | 27 |
| | — |
| | 27 |
| Cash used for investing activities from continuing operations | (50 | ) | | (23 | ) | | (173 | ) | | — |
| | (246 | ) | Financing Activities: | | | | | | | | | | Payments on short-term debt | 457 |
| | — |
| | — |
| | — |
| | 457 |
| Payments on senior notes | (400 | ) | | — |
| | — |
| | — |
| | (400 | ) | Dividends paid to shareholders | (984 | ) | | — |
| | — |
| | — |
| | (984 | ) | Dividends and other payments paid to noncontrolling interests | — |
| | — |
| | (24 | ) | | — |
| | (24 | ) | Repurchase of treasury shares | (295 | ) | | — |
| | — |
| | — |
| | (295 | ) | Exercise of stock options | 299 |
| | — |
| | — |
| | — |
| | 299 |
| Excess tax benefits from share-based payments | 42 |
| | — |
| | — |
| | — |
| | 42 |
| Intercompany financing activities | (3,402 | ) | | (456 | ) | | 1,025 |
| | 2,833 |
| | — |
| Cash (used for) provided by financing activities from continuing operations | (4,283 | ) | | (456 | ) | | 1,001 |
| | 2,833 |
| | (905 | ) | Effect of exchange rate changes on cash from continuing operations | 2 |
| | — |
| | 3 |
| | — |
| | 5 |
| Cash (used for) provided by continuing operations | (1,471 | ) | | — |
| | 1,026 |
| | 29 |
| | (416 | ) | Discontinued Operations: | | | | | | | | | | Cash provided by (used for) operating activities | 1,301 |
| | — |
| | (735 | ) | | (29 | ) | | 537 |
| Cash used for investing activities | — |
| | — |
| | (199 | ) | | — |
| | (199 | ) | Cash used for financing activities | — |
| | — |
| | (12 | ) | | — |
| | (12 | ) | Effect of exchange rate changes on cash | — |
| | — |
| | 3 |
| | — |
| | 3 |
| Effect of change in cash and equivalents | — |
| | — |
| | 12 |
| | — |
| | 12 |
| Cash provided by (used for) discontinued operations | 1,301 |
| | — |
| | (931 | ) | | (29 | ) | | 341 |
| Net change in cash and equivalents | (170 | ) | | — |
| | 95 |
| | — |
| | (75 | ) | Cash and equivalents at beginning of year | 289 |
| | — |
| | 546 |
| | — |
| | 835 |
| Cash and equivalents at end of year | $ | 119 |
| | $ | — |
| | $ | 641 |
| | $ | — |
| | $ | 760 |
|
|