McGraw Hill Financial Reports 3rd Quarter Results Revenue Increased 7% (8% Organic)

Diluted EPS from Continuing Operations Increased 58% to $0.84

Adjusted Diluted EPS from Continuing Operations Increased 13% to $0.80

Adjusted Diluted EPS Guidance Increased to a Range of $3.25 to $3.30

NEW YORK, Oct. 22, 2013 /PRNewswire-FirstCall/ -- McGraw Hill Financial, Inc. (NYSE: MHFI) today reported third quarter 2013 results with revenue of $1.19 billion, an increase of 7% compared to the same period last year and 8% excluding the impact of the sale of Aviation Week.  Net income and diluted earnings per share from continuing operations were $235 million and $0.84, respectively. 

Adjusted net income from continuing operations increased 11% to $222 million and adjusted diluted earnings per share from continuing operations increased 13% to $0.80.  The adjustments exclude the impact of the gain on sale of Aviation Week and India Index Services by CRISIL, as well as one-time costs related primarily to the Growth and Value Plan.

"The strength of our portfolio was clearly demonstrated this quarter as both S&P Dow Jones Indices and S&P Capital IQ delivered record quarterly revenue, and Commodities & Commercial Markets reported record adjusted operating margin, driving each of these segments to double-digit adjusted operating profit growth," said Harold McGraw III, Chairman, President, and Chief Executive Officer of McGraw Hill Financial.  "As a leader in providing ratings, benchmarks and analytics, McGraw Hill Financial offers investors a unique opportunity to benefit from the essential intelligence that we provide to our customers.  This world-class portfolio of businesses is the culmination of my tenure as President and CEO of this Company.  As Doug Peterson assumes his new role as President and CEO on November 1, I couldn't be more pleased with his appointment or more proud of the strength of the portfolio we have assembled and the employees who made it happen."

The Outlook:  2013 adjusted earnings per share guidance is increased to a range of $3.25 to $3.30 from $3.15 to $3.25 despite likely market volatility due in part to the Federal debt debate as well as evolving expectations for interest rates. 

Standard & Poor's Ratings Services:  Despite a decrease in global debt issuance, quarterly revenue increased 8% to $540 million compared to the same period last year, driven by strength in bank loan ratings, entity credit ratings, and rating evaluation services.  Adjusted operating profit increased 5% to $227 million with a margin of 42%.  

Transaction revenue grew 6% to $227 million compared to the same period last year as a result of a 73% increase in bank loan ratings.  Issuance, the traditional driver of overall segment revenue growth, decreased during the quarter with a 9% increase in structured issuance more than offset by an 11% decrease in corporate and public issuance. 

Non-transaction revenue increased 9% in the quarter and represented 58% of Standard & Poor's Ratings' total revenue compared to 57% for the same period last year.  Non-transaction growth was driven primarily by entity credit ratings and rating evaluation services. 

Domestic revenue increased 6% and international revenue increased 10%.  Foreign exchange rates had a negligible impact on results. International revenue represented 46% of Standard & Poor's Ratings' total third-quarter revenue.

Tender for CRISIL Shares:  On August 6, the Company completed a voluntary tender offer for additional shares of CRISIL Limited, a publicly traded company in India.  As a result, the Company's ownership in CRISIL increased from 52.8% to 67.8% which represented an incremental investment of $214 million.

S&P Capital IQ:  Revenue increased 3% to $293 million in the third quarter of 2013 compared to the same period last year.  Excluding ongoing portfolio rationalization, organic revenue growth was 5%.  This was the highest revenue quarter for the segment.  Adjusted operating profit returned to growth with an increase of 10% to $59 million

Desktop Solutions, Enterprise Solutions and Ratings IP all delivered mid single-digit revenue growth while Proprietary Research revenue declined mid single-digits. 

S&P Capital IQ's international revenue increased by 8% to $100 million in the third quarter and represented 34% of the segment's total revenue.

Efforts continue to invest in the more promising pieces of the business to create unique product offerings such as the new Portfolio Risk Solution and Events Driven Alerts.  Simultaneously, the segment continued to fine tune its portfolio resulting in the sale of Financial Communications and the exploration of strategic options for FMR Europe.

S&P Dow Jones Indices:  Revenue increased 14% to $124 million in the third quarter of 2013 compared to the same period last year.  Adjusted quarterly operating profit increased 23% to $80 million.

Exchange-traded funds and exchange-traded derivatives were two key drivers of revenue growth.  Assets under management in exchange-traded funds based on the S&P Dow Jones Indices increased 29% to $585 billion at the end of the quarter.  Trading volume of the exchange-traded derivatives SPX (S&P 500 Index) and VIX (CBOE Volatility Index) increased 18% and 26%, respectively.   

Revenue growth was partially mitigated by declines in mutual funds and modest growth in the data subscription business. 

Commodities & Commercial Markets:  Revenue increased 7% to $255 million. Adjusted operating profit increased 24% to $82 million in the third quarter compared to the same period last year.

Platts continued to experience steady revenue growth, delivering a 17% increase to $142 million for the period.  Growth in petroleum product subscriptions continued to be the primary driver of double-digit growth.  In addition, metals & agriculture product subscriptions delivered double-digit revenue growth while petrochemicals and power & gas reported single-digit revenue increases.

Commercial Markets' revenue decreased 4%, however, organic revenue grew 1% excluding the sale of Aviation Week.  J.D. Power delivered mid single-digit growth primarily from its strong auto business in China.

Unallocated Expense:  Unallocated expense includes corporate functions and centrally managed costs.  Adjusted unallocated expense increased by 10% to $52 million in the third quarter primarily due to increased unoccupied office space.

Non-GAAP Adjustments to Continuing Operations:  During the third quarter, approximately $11 million of net pre-tax benefits were excluded from the adjusted results.  These included $27 million of gains on the sale of Aviation Week and the sale of India Index Services by CRISIL.  These gains more than offset restructuring and Growth and Value Plan costs as well as a loss from the sale of Financial Communications. 

Share Repurchase:  During the quarter, the Company repurchased approximately 5.7 million shares.  Year-to-date, the Company has spent $850 million and repurchased approximately 15 million shares.  The Company now has approximately 1.9 million shares remaining under the existing authorization from the Board of Directors and expects to continue share repurchases completing this authorization by year-end.

Balance Sheet and Cash Flow:  Cash and equivalents at the end of the third quarter were $1.6 billion, up from $760 million at the end of 2012.  In the first nine months of the year, free cash flow from continuing operations was $388 million, a decrease of $132 million from the same period in 2012. The decline was impacted by legal settlements and the timing of tax payments.

Comparison of Adjusted Information to U.S. GAAP Information:  Adjusted diluted earnings per share, adjusted diluted earnings per share from continuing operations, adjusted net income, adjusted operating profit, adjusted unallocated expense and free cash flow are non-GAAP financial measures contained in this earnings release that are derived from the Company's continuing operations.  This information is provided in order to allow investors to make meaningful comparisons of the Company's operating performance between periods and to view the Company's business from the same perspective as Company management.  These non-GAAP measures may be different than similar measures used by other companies.  Reconciliations for the differences between non-GAAP measures used in this earnings release and comparable financial measures calculated in accordance with U.S. GAAP are attached as Exhibits 5 and 8.

Conference Call/Webcast Details:  The Company's senior management will review the third quarter earnings results on a conference call scheduled for this morning, October 22, 2013, at 8:30 a.m. Eastern Time.  This call is open to all interested parties.  Discussions may include forward-looking information.  Additional information presented on the conference call may be made available on the Company's Investor Relations Website at http://investor.mhfi.com.

The Webcast will be available live and in replay at
http://investor.mhfi.com/phoenix.zhtml?p=irol-eventDetails&c=96562&eventID=5031496.  (Please copy and paste URL into Web browser.)

Telephone access is available.  Domestic participants may call (888) 391-6568; international participants may call +1 (415) 228-4733 (long distance charges will apply).  The passcode is "McGraw Hill" and the conference leader is Harold McGraw III.  A recorded telephone replay will be available approximately two hours after the meeting concludes and will remain available until November 22, 2013.  Domestic participants may call (800) 839-1169; international participants may call +1 (203) 369-3036 (long distance charges will apply).  No passcode is required.

The forward-looking statements in this news release involve risks and uncertainties and are subject to change based on various important factors, including worldwide economic, financial, liquidity, political and regulatory conditions; the health of debt (including U.S. residential mortgage-backed securities and collateralized debt obligations) and equity markets, including possible future interest rate changes; the health of the economy; the successful marketing of competitive products; and the effect of competitive products and pricing.

About McGraw Hill Financial:  McGraw Hill Financial is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include  Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com

Investor Relations:  http://investor.mhfi.com

Get news direct from McGraw Hill Financial via RSS:
http://investor.mhfi.com/phoenix.zhtml?c=96562&p=rssSubscription&t=&id=& 

Release issued:  October 22, 2013

Contact:

Investor Relations:
Chip Merritt
Vice President, Investor Relations
(212) 512-4321 (office)
chip.merritt@mhfi.com  

News Media:
Jason Feuchtwanger
Director, Corporate Media Relations
(212) 512-3151 (office)
jason.feuchtwanger@mhfi.com

 

 


Exhibit 1




McGraw Hill Financial
Condensed Consolidated Statements of Income
Three and nine months ended September 30, 2013 and 2012
(dollars in millions, except per share data)



(unaudited)

Three Months

Nine Months



2013


2012


%

Change



2013


2012


%

Change

















Revenue


$

1,194



$

1,116



7%



$

3,625



$

3,224



12%


Expenses


811



841



(4)%



2,528



2,359



7%


Other income


24





N/M



24





N/M


Operating profit


407



275



48%



1,121



865



30%


Interest expense, net


14



21



(31)%



45



63



(28)%


Income from continuing operations
           before taxes on income


393



254



55%



1,076



802



34%


Provision for taxes on income


128



82



56%



364



287



27%


Income from continuing operations


265



172



54%



712



515



38%


Income (loss) from discontinued operations




165



(100)%



(27)



169



N/M


(Loss) gain on sale of discontinued operations


(20)





N/M



592





N/M


Discontinued operations, net of tax


(20)



165



N/M



565



169



N/M


Net income


245



337



(27)%



1,277



684



87%


Less: net income attributable to
   noncontrolling interests - continuing


(30)



(21)



45%



(74)



(29)



N/M


Less: net (income) loss attributable to
    noncontrolling interests - discontinued




(2)



N/M



1



(2)



N/M


Net income attributable to McGraw Hill Financial, Inc.


$

215



$

314



(31)%



$

1,204



$

652



85%

















Amounts attributable to McGraw Hill
  Financial, Inc. common shareholders:















Income from continuing operations


$

235



$

151



55%



$

638



$

486



31%


(Loss) income from discontinued operations


(20)



163



N/M



566



167



N/M


Net income


$

215



$

314



(31)%



$

1,204



$

653



84%

















Earnings per share attributable to McGraw Hill
   Financial, Inc. common shareholders:















Income from continuing operations:















Basic


$

0.86



$

0.54



59%



$

2.31



$

1.74



33%


Diluted


$

0.84



$

0.53



58%



$

2.27



$

1.71



33%


Income from discontinued operations:















Basic


$

(0.07)



$

0.58



N/M



$

2.05



$

0.60



N/M


Diluted


$

(0.07)



$

0.57



N/M



$

2.02



$

0.59



N/M


Net income:















Basic


$

0.79



$

1.13



(30)%



$

4.36



$

2.34



86%


Diluted


$

0.77



$

1.10



(30)%



$

4.29



$

2.29



87%

















Weighted-average number of common shares
   outstanding:















Basic


272.8



278.7






275.8



278.8





Diluted


278.8



284.6






280.4



284.6




















N/M - not meaningful















Note - % change in the tables throughout the exhibits are calculated off of the actual number, not the rounded number presented.


 

 

Exhibit 2








McGraw Hill Financial
Condensed Consolidated Balance Sheets
September 30, 2013 and December 31, 2012

(dollars in millions)


(unaudited)


September 30,



December 31,




2013



2012









Assets:







Cash and equivalents


$

1,577




$

760



Other current assets


1,251




1,199



Assets held for sale (a)





1,940



     Total current assets


2,828




3,899



Property and equipment, net


336




368



Goodwill and other intangible assets, net


2,429




2,519



Other non-current assets


255




266



     Total assets


$

5,848




$

7,052










Liabilities and Equity:







Short-term debt


$




$

457



Unearned revenue


1,240




1,229



Other current liabilities


1,119




1,317



Liabilities held for sale (a)





664



Long-term debt


799




799



Pension, other postretirement benefits and other non-current liabilities


865




936



     Total liabilities


4,023




5,402



Redeemable noncontrolling interest


810




810



     Total equity


1,015




840



     Total liabilities and equity


$

5,848




$

7,052










(a) Includes McGraw-Hill Education as of December 31, 2012.




 

 

Exhibit 3


McGraw Hill Financial
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 2013 and 2012

(dollars in millions)


(unaudited)


2013



2012









Operating Activities:







Income from continuing operations


$

712




$

515



Adjustments to reconcile income from operations to cash provided by operating
   activities from continuing operations:







Depreciation (including amortization of technology projects)


65




69



Amortization of intangibles


38




35



Stock-based compensation


73




63



Other


7




71



Net changes in operating assets and liabilities


(396)




(155)



Cash provided by operating activities from continuing operations


499




598










Investing Activities:







Capital expenditures


(55)




(70)



Acquisitions, net of cash acquired





(156)



Proceeds from dispositions


52






Changes in short-term investments


(15)




27



Cash used for investing activities from continuing operations


(18)




(199)










Financing Activities:







Repayments of short-term debt, net


(457)






Dividends paid to shareholders


(232)




(216)



Dividends and other payments paid to noncontrolling interests


(56)




(8)



Purchase of CRISIL shares


(214)






Repurchase of treasury shares


(850)




(269)



Exercise of stock options and other


209




271



Cash used for financing activities from continuing operations


(1,600)




(222)



Effect of exchange rate changes on cash from continuing operations


(7)




9



Cash (used for) provided by continuing operations


(1,126)




186



Cash provided by discontinued operations


1,943




114



Net change in cash and equivalents


817




300



Cash and equivalents at beginning of period


760




835



Cash and equivalents at end of period


$

1,577




$

1,135










 

 

Exhibit 4


McGraw Hill Financial
Operating Results by Segment
Three and nine months ended September 30, 2013 and 2012

(dollars in millions)


(unaudited)

Three Months

Nine Months


















Revenue



Revenue



















2013


2012


% Change



2013


2012


% Change

















S&P Ratings


$

540



$

502



8%



$

1,701



$

1,451



17%


S&P Capital IQ


293



284



3%



868



835



4%


S&P Dow Jones Indices


124



109



14%



363



277



31%


Commodities & Commercial Markets


255



239



7%



750



713



5%


Intersegment Elimination


(18)



(18)



(6)%



(57)



(52)



(11)%


     Total revenue


$

1,194



$

1,116



7%



$

3,625



$

3,224



12%


































Segment Expenses



Segment Expenses



















2013


2012


% Change



2013


2012


% Change

















S&P Ratings


$

297



$

293



1%



$

922



$

848



9%


S&P Capital IQ


239



244



(2)%



703



675



4%


S&P Dow Jones Indices


44



48



(7)%



136



129



5%


Commodities & Commercial Markets


164



179



(8)%



514



518



(1)%


Intersegment Elimination


(18)



(18)



(6)%



(57)



(52)



(11)%


     Total segment expenses


$

726



$

746



(3)%



$

2,218



$

2,118



5%


































Operating Profit



Operating Profit



















2013


2012


% Change



2013


2012


% Change

















S&P Ratings


$

243



$

209



16%



$

779



$

603



29%


S&P Capital IQ


54



40



37%



165



160



3%


S&P Dow Jones Indices


80



61



32%



227



148



53%


Commodities & Commercial Markets


91



60



52%



236



195



21%


     Total operating segments


468



370



27%



1,407



1,106



27%


Unallocated expense


(61)



(95)



(36)%



(286)



(241)



19%


     Total operating profit


$

407



$

275



48%



$

1,121



$

865



30%

















 

 

Exhibit 5


McGraw Hill Financial
Operating Results by Segment - Reported vs. Performance
Three and nine months ended September 30, 2013 and 2012

(dollars in millions, except per share amounts)


(unaudited)


2013



2012



% Change




Reported


Non-GAAP Adjustments


Performance



Reported


Non-GAAP Adjustments


Performance



Reported


Performance























Three Months

S&P Ratings


$

243



$

(16)


a

$

227




$

209



$

8


b

$

217




16%


5%


S&P Capital IQ


54



5


a

59




40



14


b

54




37%


10%


S&P Dow Jones Indices


80





80




61



4


b

65




32%


23%


Commodities & Commercial Markets


91



(9)


a

82




60



7


b

67




52%


24%


Segment operating profit


468



(20)



448




370



33



403




27%


11%


Unallocated expense  


(61)



9


c

(52)




(95)



48


c

(47)




(36)%


10%


Operating profit


407



(11)



396




275



81



356




48%


12%


Interest expense, net  


14





14




21





21




(31)%


(31)%


Income before taxes on income


393



(11)



382




254



81



335




55%


14%


Provision for taxes on income


128



6



134




82



30



112




56%


19%


Income from continuing operations


265



(17)



248




172



51



223




54%


12%


Income from discontinued operations


(20)



20






165



(165)






N/M


N/M


Net income


245



3



248




337



(114)



223




(27)%


12%


Less: NCI net income - continuing


(30)



4



(26)




(21)



(1)



(22)




45%


21%


Less: NCI net income - discontinued









(2)



2






N/M


N/M


Net income - continuing


235



(13)



222




151



50



201




55%


11%


Net income - discontinued


(20)



20






163



(163)






N/M


N/M


Net income attributable to MHFI


$

215



$

7



$

222




$

314



$

(113)



$

201




(32)%


12%






















Diluted EPS - continuing


$

0.84



$

(0.04)



$

0.80




$

0.53



$

0.17



$

0.71




58%


13%


Diluted EPS - total


$

0.77



$

0.03



$

0.80




$

1.10



$

(0.40)



$

0.71




(30)%


13%























Nine Months

S&P Ratings


$

779



$

(16)


a

$

763




$

603



$

8


b

$

611




29%


25%


S&P Capital IQ


165



5


a

170




160



15


b

175




3%


(3)%


S&P Dow Jones Indices


227





227




148



19


b

167




53%


36%


Commodities & Commercial Markets


236



(9)


a

227




195



6


b

201




21%


13%


Segment operating profit


1,407



(20)



1,387




1,106



48



1,154




27%


20%


Unallocated expense  


(286)



140


c

(146)




(241)



101


c

(140)




19%


4%


Operating profit


1,121



120



1,241




865



149



1,014




30%


22%


Interest expense, net  


45





45




63





63




(28)%


(30)%


Income before taxes on income


1,076



120



1,196




802



149



951




34%


26%


Provision for taxes on income


364



55



419




287



56



343




27%


21%


Income from continuing operations


712



65



777




515



93



608




38%


28%


Income from discontinued operations


565



(565)






169



(169)






N/M


N/M


Net income


1,277



(500)



777




684



(76)



608




87%


28%


Less: NCI net income - continuing


(74)



4



(70)




(29)



(1)



(30)




N/M


N/M


Less: NCI net loss - discontinued


1



(1)






(2)



2






N/M


N/M


Net income - continuing


638



69



707




486



92



578




31%


22%


Net income - discontinued


566



(566)






167



(167)






N/M


N/M


Net income attributable to MHFI


$

1,204



$

(497)



$

707




$

653



$

(75)



$

578




84%


22%






















Diluted EPS - continuing


$

2.27



$

0.25



$

2.52




$

1.71



$

0.32



$

2.03




33%


24%


Diluted EPS - total


$

4.29



$

(1.77)



$

2.52




$

2.29



$

(0.26)



$

2.03




87%


24%



N/M - not meaningful

Note - Totals presented may not sum due to rounding

(a)    S&P Ratings includes a gain on the sale of an equity investment held by CRISIL; S&P Capital IQ includes a loss on the sale of Financial Communications and restructuring charges; and Commodities & Commercial Markets includes a gain on the sale of Aviation Week and restructuring charges.

(b)   Includes restructuring charges for the nine months of 2012, and S&P Dow Jones Indices also includes transaction costs associated with our S&P Dow Jones LLC joint venture.

(c)    Includes Growth and Value Plan related costs necessary to enable the separation of MHE and reduce our cost structure, which primarily includes professional fees, restructuring charges and other non-recurring costs. The nine months of 2013 also includes pre-tax legal settlements of approximately $77 million and the nine months of 2012 also includes a charge related to a reduction in our lease commitments.

 

Exhibit 6


McGraw Hill Financial
Subscription / Non-Transaction vs. Non-Subscription / Transaction Revenue
Three and nine months ended September 30, 2013 and 2012

(dollars in millions)


(unaudited)


Subscription / Non-Transaction



Non-Subscription / Transaction




2013


2012


% Change



2013


2012


% Change



















Three Months


S&P Ratings (a)


$

313



$

287



9%



$

227



$

215



6%


S&P Capital IQ (b)


265



257



3%



28



27



5%


S&P Dow Jones Indices (c)


25



24



5%



99



85



17%


Commodities Markets (d)


128



111



15%



14



10



46%


Commercial Markets (e)


36



38



(7)%



77



80



(3)%


Intersegment elimination


(18)



(18)



6%









Total revenue


$

749



$

699



7%



$

445



$

417



7%



















Nine Months


S&P Ratings (a)


$

923



$

839



10%



$

778



$

612



27%


S&P Capital IQ (b)


785



755



4%



83



80



4%


S&P Dow Jones Indices (c)


77



61



25%



286



216



33%


Commodities Markets (d)


370



330



12%



39



30



30%


Commercial Markets (e)


111



114



(3)%



230



239



(4)%


Intersegment elimination


(57)



(52)



11%









     Total revenue


$

2,209



$

2,047



8%



$

1,416



$

1,177



20%

















(a)    Non-transaction revenue is primarily related to annual fees for frequent issuer programs and surveillance, while transaction revenue is related to ratings of publicly-issued debt, bank loan ratings and corporate credit estimates. Non-transaction revenue also includes an intersegment revenue elimination, which mainly consists of the royalty of $18 million and $54 million for the three and nine months ended September 30, 2013, respectively, and $17 million and $51 million for three and nine months ended September 30, 2012, respectively, charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings.

(b)   Subscription revenue is related to credit ratings-related information products, S&P Capital IQ platform, investment research products and other data subscriptions, while non-subscription revenue is related to certain advisory, pricing and analytical services.

(c)    Subscription revenue is related to data subscriptions, which support index fund management, portfolio analytics and research, while non-subscription revenue is related to fees based on assets underlying exchange-traded funds, as well as certain advisory, pricing and analytical services.

(d)   Subscription revenue is related to Platts real-time news, market data, and price assessments, along with other print and digital information products, while non-subscription revenue is related to consulting engagements, events, and transactional activity related to licensing.

(e)    Subscription revenue is related to print and digital information products primarily serving the automotive and construction markets, while non-subscription revenue is related to syndicated and proprietary research studies, advertising, consulting engagements and events.

 

 

Exhibit 7


McGraw Hill Financial
Domestic vs. International Revenue
Three and nine months ended September 30, 2013 and 2012

(dollars in millions)


(unaudited)


Domestic



International




2013


2012


% Change



2013


2012


% Change



















Three Months


S&P Ratings


$

290



$

275



6%



$

250



$

227



10%


S&P Capital IQ


193



191



1%



100



93



8%


S&P Dow Jones Indices


99



85



16%



25



24



6%


Commodities Markets


57



46



24%



85



75



13%


Commercial Markets


82



88



(7)%



31



30



4%


Intersegment elimination


(9)



(9)



11%



(9)



(9)



6%


Total revenue


$

712



$

676



5%



$

482



$

440



10%



















Nine Months


S&P Ratings


$

927



$

785



18%



$

774



$

666



16%


S&P Capital IQ


573



559



2%



295



276



7%


S&P Dow Jones Indices


286



214



34%



77



63



21%


Commodities Markets


161



142



14%



248



218



13%


Commercial Markets


256



273



(6)%



85



80



7%


Intersegment elimination


(28)



(26)



8%



(29)



(26)



14%


     Total revenue


$

2,175



$

1,947



12%



$

1,450



$

1,277



14%

















 

 

Exhibit 8




McGraw Hill Financial
Non-GAAP Financial Information
Three and nine months ended September 30, 2013 and 2012

 


(dollars in millions)






Computation of Free Cash Flow


(unaudited)


Nine Months




2013


2012


Cash provided by operating activities


$

499



$

598



Capital expenditures


(55)



(70)



Dividends and other payments paid to noncontrolling interests


(56)



(8)



Free cash flow


$

388



$

520









 

McGraw Hill Financial Organic Revenue

(unaudited)


Three Months



Nine Months




2013


2012


% Change



2013


2012


% Change


Total Revenue


$

1,194



$

1,116



7%



$

3,625



$

3,224



12%


Aviation Week


(2)



(9)






(26)



(34)





Product closures at S&P Capital IQ


(1)



(5)






(6)



(16)





Total Organic Revenue


$

1,191



$

1,102



8%



$

3,593



$

3,174



13%

















 

Adjusted S&P Capital IQ Revenue


(unaudited)


Three Months



Nine Months




2013


2012


% Change



2013


2012


% Change


S&P Capital IQ


$

293



$

284



3%



$

868



$

835



4%


Product closures


(1)



(5)






(6)



(16)





Adjusted S&P Capital IQ


$

292



$

279



5%



$

862



$

819



5%

















 

Adjusted Commodities & Commercial Markets Revenue


(unaudited)


Three Months



Nine Months




2013


2012


% Change



2013


2012


% Change


Commodities & Commercial Markets


$

255



$

239



7%



$

750



$

713



5%


Aviation Week


(2)



(9)






(26)



(34)





Adjusted Commodities &
         Commercial Markets


$

253



$

230



10%



$

724



$

679



7%

















Commercial Markets


$

113



$

118



(4)%



$

341



$

353



(3)%


Aviation Week


(2)



(9)






(26)



(34)





Adjusted Commercial Markets


$

111



$

109



1%



$

315



$

319



(1)%

















 

Adjusted S&P Dow Jones Indices Net Operating Profit



Three Months



Nine Months


(unaudited)


2013


2012


% Change



2013


2012


% Change


Operating profit


$

80



$

65



23%



$

227



$

167



36%


Operating profit attributable to NCI


22



18






60



18





Net operating profit


$

58



$

47



23%



$

167



$

149



11%

















 

 

SOURCE McGraw Hill Financial



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