Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Oct. 17, 2014 |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'MCGRAW HILL FINANCIAL INC | ' |
Entity Central Index Key | '0000064040 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 271.5 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue | $1,263 | $1,152 | $3,761 | $3,496 |
Expenses: | ' | ' | ' | ' |
Operating-related expenses | 399 | 371 | 1,205 | 1,114 |
Selling and general expenses | 465 | 377 | 1,186 | 1,216 |
Depreciation | 21 | 20 | 64 | 65 |
Amortization of intangibles | 12 | 13 | 36 | 38 |
Total expenses | 897 | 781 | 2,491 | 2,433 |
Other (income) loss | 0 | -24 | 9 | -24 |
Operating profit | 366 | 395 | 1,261 | 1,087 |
Interest expense, net | 12 | 14 | 40 | 45 |
Income from continuing operations before taxes on income | 354 | 381 | 1,221 | 1,042 |
Provision for taxes on income | 139 | 123 | 428 | 351 |
Income from continuing operations | 215 | 258 | 793 | 691 |
Discontinued operations, net of tax: | ' | ' | ' | ' |
Income (loss) from discontinued operations | 2 | 7 | 15 | -6 |
(Loss) gain on sale of discontinued operations | 0 | -20 | 0 | 592 |
Discontinued operations, net | 2 | -13 | 15 | 586 |
Net income | 217 | 245 | 808 | 1,277 |
Less: net income from continuing operations attributable to noncontrolling interests | -27 | -30 | -77 | -74 |
Less: net loss from discontinued operations attributable to noncontrolling interests | 0 | 0 | 0 | 1 |
Net income | 190 | 215 | 731 | 1,204 |
Amounts attributable to McGraw Hill Financial, Inc. common shareholders: | ' | ' | ' | ' |
Income from continuing operations | 188 | 228 | 716 | 617 |
Income (loss) from discontinued operations | 2 | -13 | 15 | 587 |
Net income | $190 | $215 | $731 | $1,204 |
Income from continuing operations: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.69 | $0.83 | $2.64 | $2.24 |
Diluted (in dollars per share) | $0.68 | $0.82 | $2.59 | $2.20 |
Income from discontinued operations: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | ($0.05) | $0.05 | $2.13 |
Diluted (in dollars per share) | $0.01 | ($0.05) | $0.05 | $2.09 |
Net income: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.70 | $0.79 | $2.69 | $4.36 |
Diluted (in dollars per share) | $0.69 | $0.77 | $2.64 | $4.29 |
Weighted-average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 270.9 | 272.8 | 271.4 | 275.8 |
Diluted (in shares) | 275.4 | 278.8 | 276.2 | 280.4 |
Dividend declared per common share (in usd per share) | $0.30 | $0.28 | $0.90 | $0.84 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $217 | $245 | $808 | $1,277 |
Other comprehensive income: | ' | ' | ' | ' |
Foreign currency translation adjustment | -68 | 40 | -56 | 84 |
Income tax effect | 1 | -2 | 1 | -4 |
Foreign currency translation adjustment, net of income tax effect | -67 | 38 | -55 | 80 |
Pension and other postretirement benefit plans | 0 | 6 | -54 | -28 |
Income tax effect | 0 | -3 | 21 | 3 |
Pension and other post-retirement benefit plans, net of income tax effect | 0 | 3 | -33 | -25 |
Unrealized gain (loss) on investments and forward exchange contracts | 0 | -9 | 4 | -2 |
Income tax effect | 0 | 5 | -1 | 1 |
Unrealized gain (loss) on investments and forward exchange contracts, net of income tax effect | 0 | -4 | 3 | -1 |
Comprehensive income | 150 | 282 | 723 | 1,331 |
Less: comprehensive income attributable to nonredeemable noncontrolling interests | -4 | -9 | -8 | -15 |
Less: comprehensive income attributable to redeemable noncontrolling interests | -23 | -22 | -69 | -60 |
Comprehensive income attributable to McGraw Hill Financial, Inc. | $123 | $251 | $646 | $1,256 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and equivalents | $1,918 | $1,542 |
Accounts receivable, net of allowance for doubtful accounts: 2014 - $44; 2013 - $50 | 928 | 949 |
Deferred income taxes | 108 | 108 |
Prepaid and other current assets | 207 | 245 |
Assets held for sale | 27 | 97 |
Total current assets | 3,188 | 2,941 |
Property and equipment, net of accumulated depreciation: 2014 - $583; 2013 - $609 | 199 | 249 |
Goodwill | 1,435 | 1,409 |
Other intangible assets, net | 1,012 | 1,033 |
Asset for pension benefits | 241 | 261 |
Other non-current assets | 195 | 168 |
Total assets | 6,270 | 6,061 |
Current liabilities: | ' | ' |
Accounts payable | 192 | 210 |
Accrued compensation and contributions to retirement plans | 334 | 423 |
Income taxes currently payable | 73 | 15 |
Unearned revenue | 1,266 | 1,268 |
Other current liabilities | 476 | 401 |
Liabilities held for sale | 43 | 54 |
Total current liabilities | 2,384 | 2,371 |
Long-term debt | 799 | 799 |
Pension and other postretirement benefits | 258 | 264 |
Other non-current liabilities | 429 | 473 |
Total liabilities | 3,870 | 3,907 |
Redeemable noncontrolling interest (Note 7) | 810 | 810 |
Commitments and contingencies (Note 11) | ' | ' |
Equity: | ' | ' |
Common stock | 412 | 412 |
Additional paid-in capital | 411 | 447 |
Retained income | 7,877 | 7,384 |
Accumulated other comprehensive loss | -281 | -196 |
Less: common stock in treasury | -6,878 | -6,746 |
Total equity — controlling interests | 1,541 | 1,301 |
Total equity — noncontrolling interests | 49 | 43 |
Total equity | 1,590 | 1,344 |
Total liabilities and equity | $6,270 | $6,061 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $44 | $50 |
Property and equipment, accumulated depreciation | $583 | $609 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities: | ' | ' |
Net income | $808 | $1,277 |
Less: discontinued operations, net | 15 | 586 |
Income from continuing operations | 793 | 691 |
Adjustments to reconcile income from continuing operations to cash provided by operating activities from continuing operations: | ' | ' |
Depreciation | 64 | 65 |
Amortization of intangibles | 36 | 38 |
Provision for losses on accounts receivable | 5 | 18 |
Deferred income taxes | -33 | 3 |
Stock-based compensation | 72 | 70 |
Other | 106 | -24 |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: | ' | ' |
Accounts receivable | 12 | -15 |
Prepaid and other current assets | -8 | -43 |
Accounts payable and accrued expenses | -211 | -165 |
Unearned revenue | 7 | 44 |
Other current liabilities | -65 | -44 |
Net change in prepaid/accrued income taxes | 93 | -121 |
Net change in other assets and liabilities | -51 | -41 |
Cash provided by operating activities from continuing operations | 820 | 476 |
Investing Activities: | ' | ' |
Capital expenditures | -52 | -55 |
Acquisitions, net of cash acquired | -65 | 0 |
Proceeds from dispositions | 83 | 52 |
Changes in short-term investments | -1 | -15 |
Cash used for investing activities from continuing operations | -35 | -18 |
Financing Activities: | ' | ' |
Repayments of short-term debt, net | 0 | -457 |
Dividends paid to shareholders | -245 | -232 |
Dividends and other payments paid to noncontrolling interests | -31 | -56 |
Contingent consideration payment | -11 | -12 |
Purchase of CRISIL shares | 0 | -214 |
Repurchase of treasury shares | -362 | -850 |
Exercise of stock options | 159 | 195 |
Excess tax benefits from share-based payments | 89 | 26 |
Cash used for financing activities from continuing operations | -401 | -1,600 |
Effect of exchange rate changes on cash from continuing operations | -24 | -7 |
Cash provided by (used for) continuing operations | 360 | -1,149 |
Discontinued Operations: | ' | ' |
Cash used for operating activities | 16 | -169 |
Cash provided by investing activities | 0 | 2,159 |
Cash used for financing activities | 0 | -25 |
Effect of exchange rate changes on cash | 0 | 1 |
Cash provided by discontinued operations | 16 | 1,966 |
Net change in cash and equivalents | 376 | 817 |
Cash and equivalents at beginning of period | 1,542 | 760 |
Cash and equivalents at end of period | $1,918 | $1,577 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (Unaudited) (USD $) | Total | Common Stock $1 par | Additional Paid-in Capital | Retained Income | Accumulated Other Comprehensive Loss | Less: Treasury Stock | Total MHFI Equity | Noncontrolling Interests | |
In Millions, unless otherwise specified | |||||||||
Balance as of December 31, 2013 at Dec. 31, 2013 | $1,344 | $412 | $447 | $7,384 | ($196) | $6,746 | $1,301 | $43 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | |
Comprehensive Income | [1] | 654 | ' | ' | 731 | -85 | ' | 646 | 8 |
Dividends | -249 | ' | ' | -242 | ' | ' | -242 | -7 | |
Share repurchases | -352 | ' | ' | ' | ' | 352 | -352 | ' | |
Employee stock plans, net of tax benefit | 184 | ' | -36 | ' | ' | -220 | 184 | ' | |
Change in redemption value of redeemable noncontrolling interest | 4 | ' | ' | 4 | ' | ' | 4 | ' | |
Other | 5 | ' | ' | ' | ' | ' | 0 | 5 | |
Net income attributable to noncontrolling interest | 69 | ' | ' | ' | ' | ' | ' | ' | |
Balance as of September 30, 2014 at Sep. 30, 2014 | $1,590 | $412 | $411 | $7,877 | ($281) | $6,878 | $1,541 | $49 | |
[1] | Excludes $69 million attributable to our redeemable noncontrolling interest. |
Nature_of_Operations_and_Basis
Nature of Operations and Basis of Presentation | 9 Months Ended | |
Sep. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Nature of Operations and Basis of Presentation | ' | |
Nature of Operations and Basis of Presentation | ||
McGraw Hill Financial, Inc. (together with its consolidated subsidiaries, "McGraw Hill Financial," the “Company,” “we,” “us” or “our”) is a leading ratings, benchmarks and analytics provider serving the global capital, commodities and commercial markets. The capital markets include asset managers, banks, exchanges, issuers and financial advisors; the commodities markets include producers, traders and intermediaries within energy, metals, and agriculture; and the commercial markets include professionals and corporate executives within automotive and marketing / research information services. | ||
Our operations consist of four reportable segments: Standard & Poor’s Ratings Services (“S&P Ratings”), S&P Capital IQ, S&P Dow Jones Indices ("S&P DJ Indices") and Commodities & Commercial Markets (“C&C”). | ||
• | S&P Ratings is an independent provider of credit ratings, research and analytics, offering investors and market participants information, ratings and benchmarks. | |
• | S&P Capital IQ is a global provider of multi-asset-class data, research and analytical capabilities, which integrate cross-asset analytics and desktop services. | |
• | S&P DJ Indices is a global index provider that maintains a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors. | |
• | C&C consists of business-to-business companies specializing in commercial and commodities markets that deliver their customers access to high-value information, data, analytic services and pricing and quality benchmarks. | |
On September 22, 2014, we announced a definitive agreement to sell McGraw Hill Construction, which has historically been part of our C&C segment. Accordingly, the results of operations for all periods presented have been reclassified to reflect the business as a discontinued operation and the assets and liabilities of the business have been reclassified as held for sale for the periods presented. This agreement followed our announcement on March 18, 2014 that we were completing our portfolio rationalization with the evaluation of strategic alternatives for McGraw Hill Construction. See Note 2 — Acquisitions and Divestitures for further discussion. | ||
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, the financial statements included herein should be read in conjunction with the financial statements and notes included in our Form 10-K for the year ended December 31, 2013 (our “Form 10-K”). | ||
In the opinion of management all normal recurring adjustments considered necessary for a fair statement of the results of the interim periods have been included. The operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the full year. Certain prior-year amounts have been reclassified to conform to the current presentation. | ||
Our critical accounting estimates are disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, valuation of long-lived assets, goodwill and other intangible assets, pension plans, incentive compensation and stock-based compensation, income taxes, contingencies and redeemable noncontrolling interests. Since the date of our Form 10-K, there have been no material changes to our critical accounting policies and estimates. |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Acquisitions and Divestitures [Abstract] | ' | |||||||||||||||
Acquisitions and Divestitures | ' | |||||||||||||||
Acquisitions and Divestitures | ||||||||||||||||
Acquisitions | ||||||||||||||||
During the nine months ended September 30, 2014, we completed the following acquisitions: | ||||||||||||||||
• | In July of 2014, we acquired Eclipse Energy Group AS and its operating subsidiaries (“Eclipse”) that was integrated into our C&C segment. Eclipse provides a comprehensive suite of data and analytics products on the European natural gas and liquefied natural gas markets as well as a range of advisory services leveraging Eclipse’s knowledge base, data capabilities, and modeling suite of products. This transaction complements our North American natural gas capabilities we obtained from our Bentek Energy LLC acquisition in 2011. We accounted for the acquisition of Eclipse using the purchase method of accounting. The acquisition of Eclipse is not material to our consolidated financial statements. | |||||||||||||||
• | In March of 2014, we acquired the intellectual property of a family of Broad Market Indices (“BMI”) from Citigroup Global Markets Inc., that was integrated into our S&P DJ Indices segment. The BMI provides a broad measure of the global equities markets which includes approximately 11,000 companies in more than 52 countries covering both developed and emerging markets. We accounted for the acquisition of the intellectual property on a cost basis and it was not material to our consolidated financial statements. | |||||||||||||||
In June of 2013 we made a voluntary open offer to purchase up to an additional 22.23% of the total equity shares outstanding in CRISIL Limited ("CRISIL"), our majority owned Indian credit rating agency within our S&P Ratings segment. In August of 2013, at the conclusion of the tender offer period, we acquired approximately 11 million equity shares representing 15.07% of CRISIL's total outstanding equity shares for $214 million, increasing our ownership percentage in CRISIL to 67.84% from 52.77%. | ||||||||||||||||
As part of CRISIL's acquisition of Coalition Development Ltd. that occurred in July 2012, we made contingent purchase price payments in the first nine months of 2014 and 2013 for $11 million and $12 million, respectively. This has been reflected in the consolidated statement of cash flows as a financing activity. | ||||||||||||||||
Divestitures - Continuing Operations | ||||||||||||||||
During the nine months ended September 30, 2014, we completed the following dispositions that resulted in a pre-tax loss of $9 million, which was included in other (income) loss in the consolidated statement of income: | ||||||||||||||||
• | On July 2, 2014, we entered into an aircraft purchase agreement with Harold W. McGraw III, Chairman of the Company's Board of Directors and former President and CEO of the Company. On July 31, 2014, we completed the sale of the Company's aircraft for a purchase price of $20 million. During the three months ended June 30, 2014, we recorded a non-cash impairment charge of $6 million within other (income) loss in our consolidated statement of income as a result of the pending sale. See Note 13 — Related Party Transactions for further information. | |||||||||||||||
• | On June 30, 2014, we completed the sale of our data center to Quality Technology Services, LLC which owns, operates, and manages data centers. Net proceeds from the sale of $58 million were received in July of 2014. The sale includes all of the facilities and equipment on the south campus of our East Windsor, New Jersey location, inclusive of the rights and obligations associated with an adjoining solar power field. The sale resulted in an expense of $3 million recorded within other (income) loss in our consolidated statement of income, which is in addition to the non-cash impairment charge we recorded in the fourth quarter of 2013. | |||||||||||||||
During the nine months ended September 30, 2013, we completed the following dispositions that resulted in a net pre-tax gain of $24 million, which was included in other (income) loss in the consolidated statement of income: | ||||||||||||||||
• | On September 30, 2013, we completed the sale of Financial Communications, which was part of our S&P Capital IQ segment. | |||||||||||||||
• | On August 27, 2013, CRISIL sold its 49% interest in India Index Services & Products Ltd. This investment was held within our S&P Ratings segment. | |||||||||||||||
• | On August 1, 2013, we completed the sale of Aviation Week within our C&C segment to Penton, a privately held business information company. | |||||||||||||||
Discontinued Operations | ||||||||||||||||
On September 22, 2014, we announced a definitive agreement to sell McGraw Hill Construction, which has historically been part of our C&C segment, to Symphony Technology Group, a strategic private equity firm based in Palo Alto, California for $320 million in cash. We expect this transaction will close in the fourth quarter of 2014 following the receipt of regulatory approvals and completion of customary closing conditions. Accordingly, the results of operations for all periods presented have been reclassified to reflect the business as a discontinued operation and the assets and liabilities of the business have been reclassified as held for sale for the periods presented. This agreement followed our announcement on March 18, 2014 that we were completing our portfolio rationalization with the evaluation of strategic alternatives for McGraw Hill Construction. | ||||||||||||||||
On March 22, 2013, we completed the sale of McGraw-Hill Education ("MHE") to investment funds affiliated with Apollo Global Management, LLC for a purchase price of $2.4 billion in cash. We recorded an after-tax gain on the sale of $592 million for the nine months ended September 30, 2013, which is included in discontinued operations, net in the consolidated statement of income. During the three months ended September 30, 2013, we adjusted the after tax gain on the sale of MHE, primarily due to post-closing working capital adjustments. For the year ended December 31, 2013, we recorded an after-tax gain on the sale of $589 million. We have used a portion of the after-tax proceeds from the sale to pay down short-term debt, for the special dividend paid in 2012, and to continue share repurchases. We intend to continue to use a portion of the after-tax proceeds to make selective acquisitions and support general corporate purposes. | ||||||||||||||||
The key components of income from discontinued operations for the periods ended September 30, 2014 and 2013 consist of the following: | ||||||||||||||||
(in millions) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | $ | 40 | $ | 43 | $ | 124 | $ | 397 | ||||||||
Expenses | 37 | 30 | 100 | 406 | ||||||||||||
Operating income (loss) | 3 | 13 | 24 | (9 | ) | |||||||||||
Interest expense, net | — | 1 | — | 2 | ||||||||||||
Income (loss) before taxes on income (loss) | 3 | 12 | 24 | (11 | ) | |||||||||||
Provision (benefit) for taxes on income (loss) | 1 | 5 | 9 | (5 | ) | |||||||||||
Income (loss) from discontinued operations, net of tax | 2 | 7 | 15 | (6 | ) | |||||||||||
Pre-tax (loss) gain on sale from discontinued operations | — | (32 | ) | — | 888 | |||||||||||
(Benefit) provision for taxes on income | — | (12 | ) | — | 296 | |||||||||||
(Gain) loss on sale of discontinued operations, net of tax | — | (20 | ) | — | 592 | |||||||||||
Discontinued operations, net | 2 | (13 | ) | 15 | 586 | |||||||||||
Less: net loss attributable to noncontrolling interests | — | — | — | 1 | ||||||||||||
Income (loss) from discontinued operations attributable to McGraw Hill Financial, Inc. common shareholders | $ | 2 | $ | (13 | ) | $ | 15 | $ | 587 | |||||||
The components of assets and liabilities held for sale related to McGraw Hill Construction in the consolidated balance sheets consist of the following: | ||||||||||||||||
(in millions) | 30-Sep-14 | 31-Dec-13 | ||||||||||||||
Accounts receivable, net | $ | 22 | $ | 30 | ||||||||||||
Goodwill | 3 | 3 | ||||||||||||||
Other assets | 2 | 3 | ||||||||||||||
Assets held for sale | $ | 27 | $ | 36 | ||||||||||||
Accounts payable and accrued expenses | $ | 9 | $ | 13 | ||||||||||||
Unearned revenue | 34 | 41 | ||||||||||||||
Liabilities held for sale | $ | 43 | $ | 54 | ||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The effective income tax rate for continuing operations was 39.2% and 32.4% for the three months ended September 30, 2014 and September 30, 2013, respectively. The increase in the effective income tax rate was primarily due to the assumed tax treatment of charges for regulatory matters (see Note 11 — Commitments and Contingencies) and a tax benefit on the sale of Aviation Week in the third quarter of 2013. | |
The effective income tax rate for continuing operations was 35.1% and 33.6% for the nine months ended September 30, 2014 and September 30, 2013, respectively. The increase in effective income tax rate was primarily due to the assumed tax treatment of charges for regulatory matters. | |
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 September 30, 2014 and December 31, 2013, the total amount of federal, state and local, and foreign unrecognized tax benefits was $93 million and $82 million, respectively, exclusive of interest and penalties. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. In addition to the unrecognized tax benefits, as of September 30, 2014 and December 31, 2013, we had $16 million and $19 million respectively of accrued interest and penalties associated with uncertain tax positions. | |
Based on the current status of income tax audits, we believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly decrease in the next twelve months. Although the ultimate resolution of our tax audits is unpredictable, the resulting change in our unrecognized tax benefits could have a material impact on our results of operations and/or cash flows. |
Debt
Debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt | ||||||||
(in millions) | September 30, | December 31, | ||||||
2014 | 2013 | |||||||
5.9% Senior Notes, due 2017 1 | $ | 400 | $ | 400 | ||||
6.55% Senior Notes, due 2037 2 | 399 | 399 | ||||||
Long-term debt | $ | 799 | $ | 799 | ||||
1 | Interest payments are due semiannually on April 15 and October 15, and, as of September 30, 2014, the unamortized debt discount is less than $1 million. | |||||||
2 | Interest payments are due semiannually on May 15 and November 15, and, as of September 30, 2014, the unamortized debt discount is approximately $1 million. | |||||||
The fair value of our long-term debt borrowings was $860 million and $801 million as of September 30, 2014 and December 31, 2013, respectively, and was estimated based on quoted market prices. | ||||||||
Currently, we have the ability to borrow a total of $1.0 billion through our commercial paper program, which is supported by our $1.0 billion four-year credit agreement (our “credit facility”) that we entered into in June of 2013. This credit facility will terminate on June 19, 2017. As of September 30, 2014 and December 31, 2013, we had no outstanding commercial paper. | ||||||||
We pay a commitment fee of 20 to 45 basis points for our credit facility, depending on our indebtedness to cash flow ratio, 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 indebtedness to cash flow ratio added to the applicable rate. | ||||||||
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 3.25 to 1, and this covenant level has never been exceeded. |
Employee_Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Employee Benefits | ' |
Employee Benefits | |
We maintain a number of active defined contribution retirement plans for our employees. The majority of our defined benefit plans are frozen. As a result, no new employees will be permitted to enter these plans and no additional benefits for current participants in the frozen plans will be accrued. | |
We have supplemental benefit plans that provide senior management with supplemental retirement, disability and death benefits. Certain supplemental retirement benefits are based on final monthly earnings. In addition, we sponsor voluntary 401(k) plans under which we may match employee contributions up to certain levels of compensation as well as profit-sharing plans under which we contribute a percentage of eligible employees' compensation to the employees' accounts. | |
We also provide certain medical, dental and life insurance benefits for active and retired employees and eligible dependents. The medical and dental plans and supplemental life insurance plan are contributory, while the basic life insurance plan is noncontributory. We currently do not prefund any of these plans. | |
We recognize the funded status of our defined benefit retirement and postretirement plans in the consolidated balance sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of taxes. The amounts in accumulated other comprehensive loss represent unrecognized actuarial losses and unrecognized prior service costs. These amounts will be subsequently recognized as net periodic pension cost pursuant to our accounting policy for amortizing such amounts. | |
As discussed in our Form 10-K, we changed certain discount rate assumptions and our expected return on assets assumption for our retirement plans, which became effective on January 1, 2014. The effect of the assumption changes on retirement expense for the three and nine months ended September 30, 2014 did not have a material impact on our consolidated financial statements. | |
In the first nine months of 2014, we contributed $13 million to our retirement plans and expect to make additional required contributions of approximately $10 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 fourth quarter of 2014. |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation | ||||||||||||||||
We issue stock-based incentive awards to our eligible employees and Directors under the 2002 Employee Stock Incentive Plan and a Director Deferred Stock Ownership Plan. 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 September 30 is as follows: | ||||||||||||||||
(in millions) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Stock option expense | $ | 6 | $ | 4 | $ | 15 | $ | 9 | ||||||||
Restricted stock and unit awards expense | 20 | 21 | 57 | 61 | ||||||||||||
Total stock-based compensation expense | $ | 26 | $ | 25 | $ | 72 | $ | 70 | ||||||||
For the nine months ended September 30, 2014, the Company granted 0.8 million employee stock options, which had a weighted average grant date value of $23.39 per share based on the lattice-based option-pricing model. The Company also granted 0.7 million shares of restricted stock and unit awards, which had a weighted average grant date fair value of $77.81 per share. | ||||||||||||||||
Total unrecognized compensation expense related to unvested stock option awards and unvested restricted stock unit awards as of September 30, 2014 was $16 million and $88 million, respectively, which is expected to be recognized over a weighted average period of 2.3 years and 1.7 years, respectively. |
Equity
Equity | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Equity | ' | ||||||||||||||||
Equity | |||||||||||||||||
Stock Repurchases | |||||||||||||||||
On December 4, 2013, the Board of Directors approved a new stock repurchase program authorizing the purchase of 50 million shares, which was approximately 18% of the total shares of our outstanding common stock at that time. | |||||||||||||||||
In any period, share repurchase transactions could result in timing differences between the recognition of those repurchases and their settlement for cash. This could result in a difference between the cash used for financing activities related to common stock repurchased and the comparable change in equity. | |||||||||||||||||
Share repurchases for the periods ended September 30 were as follows: | |||||||||||||||||
(in millions, except average price) | Three Months | Nine Months | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Total number of shares purchased 1, 2 | — | 6.4 | 4.4 | 15 | |||||||||||||
Average price paid per share 2 | $ | — | $ | 61.42 | $ | 79.06 | $ | 61.42 | |||||||||
Total cash utilized 3 | $ | — | $ | 350 | $ | 352 | $ | 850 | |||||||||
1 | The three and nine month periods ended September 30, 2013 includes shares received as part of our accelerated share repurchase agreements described in more detail below. | ||||||||||||||||
2 | On June 25, 2014, we repurchased 0.5 million shares of the Company's common stock from the personal holdings of Harold W. McGraw III, Chairman of the Company's Board of Directors and former President and CEO of the Company, at a discount of 0.35% from the June 24, 2014 New York Stock Exchange closing price. We repurchased these shares with cash for $41 million at an average price of $82.66 per share. See Note 13 — Related Party Transactions for further information. | ||||||||||||||||
3 | In December of 2013, 0.1 million shares were repurchased for approximately $10 million, which settled in January of 2014. Cash used for financing activities only reflects those shares which settled during the nine months ended September 30, 2014 resulting in $362 million of cash used to repurchase shares. | ||||||||||||||||
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 September 30, 2014, 45.6 million shares remained available under the current share repurchase program which has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions. | |||||||||||||||||
Accelerated Share Repurchase Program | |||||||||||||||||
We entered into an accelerated share repurchase (“ASR”) agreement with a financial institution on March 25, 2013 to initiate share repurchases aggregating $500 million. The ASR agreement was structured as a capped ASR agreement in which we paid $500 million and received an initial delivery of approximately 7.2 million shares during the three months ended March 31, 2013, with an additional 1.4 million shares received on April 1, 2013, in the aggregate, representing the minimum number of shares of our common stock to be repurchased based on a calculation using a specific capped price per share. The total number of shares ultimately purchased was determined based on the volume weighted-average share price (“VWAP”), minus a discount, of our common stock from March 25, 2013 through July 22, 2013. On July 25, 2013, we received a final incremental delivery of 0.7 million shares determined using a VWAP of $53.7995, bringing the total amount of shares received to 9.3 million. | |||||||||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||
The agreement with the minority partners of our S&P Dow Jones Indices LLC established in June of 2012 contains redemption features whereby interests held by minority partners are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within our control. Specifically, under the terms of the operating agreement of S&P Dow Jones Indices LLC, after December 31, 2017, CME Group, Inc. ("CME Group") and CME Group Index Services LLC ("CGIS") will have the right at any time to sell, and we are obligated to buy, at least 20% of their share in S&P Dow Jones Indices LLC. In addition, in the event there is a change of control of the Company, for the 15 days following a change in control, CME Group and CGIS will have the right to put their interest to us at the then fair value of CME Group's and CGIS' minority interest. | |||||||||||||||||
If interests were to be redeemed under this agreement, we would generally be required to purchase the interest at fair value on the date of redemption. This interest is presented on the consolidated balance sheets outside of equity under the caption “Redeemable noncontrolling interest” with an initial value based on fair value for the portion attributable to the net assets we acquired, and based on our historical cost for the portion attributable to our S&P Index business. We adjust the redeemable noncontrolling interest each reporting period to its estimated redemption value, but never less than its initial fair value, considering a combination of an income and market valuation approach. Our income and market valuation approaches may incorporate Level 3 fair value measures for instances when observable inputs are not available, including assumptions related to expected future net cash flows, long-term growth rates, the timing and nature of tax attributes, and the redemption features. Any adjustments to the redemption value will impact retained income. | |||||||||||||||||
Noncontrolling interests that do not contain such redemption features are presented in equity. | |||||||||||||||||
Changes to redeemable noncontrolling interest during the nine months ended September 30, 2014 were as follows: | |||||||||||||||||
(in millions) | |||||||||||||||||
Balance as of December 31, 2013 | $ | 810 | |||||||||||||||
Net income attributable to noncontrolling interest | 69 | ||||||||||||||||
Distributions payable to noncontrolling interest | (65 | ) | |||||||||||||||
Redemption value adjustment | (4 | ) | |||||||||||||||
Balance as of September 30, 2014 | $ | 810 | |||||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
The following table summarizes the changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2014: | |||||||||||||||||
(in millions) | Foreign Currency Translation Adjustment | Pension and Postretirement Benefit Plans | Unrealized Gain (Loss) on Forward Exchange Contracts | Accumulated Other Comprehensive Loss | |||||||||||||
Balance as of December 31, 2013 | $ | 23 | $ | (216 | ) | $ | (3 | ) | $ | (196 | ) | ||||||
Other comprehensive income before reclassifications | (55 | ) | (36 | ) | 3 | (88 | ) | ||||||||||
Reclassifications from accumulated other comprehensive loss to net earnings | — | 3 | 1 | — | 3 | ||||||||||||
Net other comprehensive income | (55 | ) | (33 | ) | 3 | (85 | ) | ||||||||||
Balance as of September 30, 2014 | $ | (32 | ) | $ | (249 | ) | $ | — | $ | (281 | ) | ||||||
1 | See Note 5 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings. | ||||||||||||||||
The net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income is net of a tax provision of $2 million for the nine months ended September 30, 2014. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
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 and restricted performance shares calculated using the treasury stock method. | ||||||||||||||||
The calculation for basic and diluted EPS for the periods ended September 30 is as follows: | ||||||||||||||||
(in millions, except per share amounts) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Amounts attributable to McGraw Hill Financial, Inc. common shareholders: | ||||||||||||||||
Income from continuing operations | $ | 188 | $ | 228 | $ | 716 | $ | 617 | ||||||||
Income (loss) from discontinued operations | 2 | (13 | ) | 15 | 587 | |||||||||||
Net income | $ | 190 | $ | 215 | $ | 731 | $ | 1,204 | ||||||||
Basic weighted-average number of common shares outstanding | 270.9 | 272.8 | 271.4 | 275.8 | ||||||||||||
Effect of stock options and other dilutive securities | 4.5 | 6 | 4.8 | 4.6 | ||||||||||||
Diluted weighted-average number of common shares outstanding | 275.4 | 278.8 | 276.2 | 280.4 | ||||||||||||
Earnings per share attributable to McGraw Hill Financial, Inc. common shareholders: | ||||||||||||||||
Income from continuing operations: | ||||||||||||||||
Basic | $ | 0.69 | $ | 0.83 | $ | 2.64 | $ | 2.24 | ||||||||
Diluted | $ | 0.68 | $ | 0.82 | $ | 2.59 | $ | 2.2 | ||||||||
Income from discontinued operations: | ||||||||||||||||
Basic | $ | 0.01 | $ | (0.05 | ) | $ | 0.05 | $ | 2.13 | |||||||
Diluted | $ | 0.01 | $ | (0.05 | ) | $ | 0.05 | $ | 2.09 | |||||||
Net income: | ||||||||||||||||
Basic | $ | 0.7 | $ | 0.79 | $ | 2.69 | $ | 4.36 | ||||||||
Diluted | $ | 0.69 | $ | 0.77 | $ | 2.64 | $ | 4.29 | ||||||||
Each period we have certain stock options and restricted performance shares that are excluded from the computation of diluted EPS. The effect of the potential exercise of stock options is excluded 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. Additionally, restricted performance shares are excluded because the necessary vesting conditions had not been met. For the three and nine months ended September 30, 2014, there were a minimal amount of stock options excluded as compared to 1.2 million and 2.7 million stock options excluded for the three and nine months ended September 30, 2013, respectively. Additionally, restricted performance shares outstanding of 1.4 million and 0.9 million as of September 30, 2014 and 2013, respectively, were excluded. |
Restructuring
Restructuring | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||
Restructuring | ' | |||||||||||||||
Restructuring | ||||||||||||||||
During 2014 and 2013, we continued to evaluate our cost structure and further identified cost savings associated with streamlining our management structure and our decision to exit non-strategic businesses. Our 2014 and 2013 restructuring plans consisted of a company-wide workforce reduction of approximately 390 positions and 520 positions, respectively, and are further detailed below. The charges for each restructuring plan are classified as selling and general expenses within the consolidated statements of income and the reserves are included in other current liabilities in the consolidated balance sheets. | ||||||||||||||||
In certain circumstances, reserves are no longer needed because of efficiencies in carrying out the plans or because employees previously identified for separation resigned from the Company and did not receive severance or were reassigned due to circumstances not foreseen when the original plans were initiated. In these cases, we reverse reserves through the consolidated statements of income during the period when it is determined they are no longer needed. | ||||||||||||||||
As part of the definitive agreement to sell McGraw Hill Construction, which has historically been part of our C&C segment, to Symphony Technology Group, described further in Note 2 — Acquisitions and Divestitures, we have retained McGraw Hill Construction's restructuring liabilities. Therefore, the remaining reserves described below include McGraw Hill Construction's restructuring liability; however, the initial charge associated with the reserve has been bifurcated between continuing and discontinued operations. | ||||||||||||||||
The initial restructuring charge recorded and the ending reserve balance as of September 30, 2014 by segment is as follows: | ||||||||||||||||
2014 Restructuring Plan | 2013 Restructuring Plan | |||||||||||||||
(in millions) | Initial Charge Recorded | Ending Reserve Balance | Initial Charge Recorded | Ending Reserve Balance | ||||||||||||
S&P Ratings | $ | 23 | 23 | $ | 13 | $ | 5 | |||||||||
S&P Capital IQ | 5 | 4 | 10 | 1 | ||||||||||||
C&C 1 | 15 | 15 | 10 | 2 | ||||||||||||
Corporate | 7 | 6 | 16 | 2 | ||||||||||||
Total | $ | 50 | $ | 48 | $ | 49 | $ | 10 | ||||||||
1 | The 2014 restructuring plan includes an initial charge of $3 million and an ending reserve balance of $2 million for McGraw Hill Construction. The 2013 restructuring plan includes an initial charge of $1 million and an ending reserve balance of less than $1 million for McGraw Hill Construction. | |||||||||||||||
We recorded a pre-tax restructuring charge of $50 million for the 2014 restructuring plan during the three months ended September 30, 2014 and have reduced the reserve for the 2014 restructuring plan by $2 million. | ||||||||||||||||
The ending reserve balance for the 2013 restructuring plan was $39 million as of December 31, 2013. For the nine months ended September 30, 2014, we have reduced the reserve for the 2013 restructuring plan by $29 million. |
Segment_and_Related_Informatio
Segment and Related Information | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment and Related Information | ' | |||||||||||||||
Segment and Related Information | ||||||||||||||||
We have four reportable segments: S&P Ratings, S&P Capital IQ, S&P DJ Indices and C&C. Our Chief Executive Officer is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit. Segment operating profit does not include unallocated expense or interest expense as these are costs that do not affect the operating results of our segments. | ||||||||||||||||
As part of our transformation to McGraw Hill Financial, a comprehensive review of our accounting and reporting practices and policies was undertaken. As a result, beginning on January 1, 2014, to the extent they can be attributed to our continuing operations, all shared operating services have been allocated to the segments utilizing a methodology that more closely aligns with each segment's usage of these services. The costs that remain in unallocated expense primarily relate to corporate center functions and shared operating costs allocable to discontinued operations reclassified during the current year. The updated methodology is reflected in the segment results for the three and nine months ended September 30, 2014 and accordingly, the segment results for the prior-year comparative periods have been reclassified to conform with the new presentation. | ||||||||||||||||
A summary of operating results by segment for the periods ended September 30 is as follows: | ||||||||||||||||
Three Months | 2014 | 2013 | ||||||||||||||
(in millions) | Revenue | Operating Profit | Revenue | Operating Profit | ||||||||||||
S&P Ratings | $ | 604 | $ | 183 | $ | 540 | $ | 230 | ||||||||
S&P Capital IQ | 311 | 64 | 293 | 50 | ||||||||||||
S&P DJ Indices | 143 | 86 | 124 | 77 | ||||||||||||
C&C 1 | 227 | 71 | 213 | 87 | ||||||||||||
Intersegment elimination 2 | (22 | ) | — | (18 | ) | — | ||||||||||
Total operating segments | 1,263 | 404 | 1,152 | 444 | ||||||||||||
Unallocated expense 3 | — | (38 | ) | — | (49 | ) | ||||||||||
Total | $ | 1,263 | $ | 366 | $ | 1,152 | $ | 395 | ||||||||
Nine Months | 2014 | 2013 | ||||||||||||||
(in millions) | Revenue | Operating Profit | Revenue | Operating Profit | ||||||||||||
S&P Ratings | $ | 1,837 | $ | 730 | $ | 1,701 | $ | 748 | ||||||||
S&P Capital IQ | 919 | 172 | 868 | 149 | ||||||||||||
S&P DJ Indices | 412 | 260 | 363 | 218 | ||||||||||||
C&C 1 | 657 | 217 | 621 | 214 | ||||||||||||
Intersegment elimination 2 | (64 | ) | — | (57 | ) | — | ||||||||||
Total operating segments | 3,761 | 1,379 | 3,496 | 1,329 | ||||||||||||
Unallocated expense 3 | — | (118 | ) | — | (242 | ) | ||||||||||
Total | $ | 3,761 | $ | 1,261 | $ | 3,496 | $ | 1,087 | ||||||||
1 | McGraw Hill Construction has historically been part of the C&C segment. In accordance with the presentation of McGraw Hill Construction as a discontinued operation, the results of operations, inclusive of corporate overhead allocations, for all periods presented have been reclassified out of C&C's results to reflect this change. See Note 2 — Acquisitions and Divestitures for further discussion. | |||||||||||||||
2 | Revenue for S&P Ratings and expenses for S&P Capital IQ include an intersegment royalty charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings. | |||||||||||||||
3 | The three and nine months ended September 30, 2014 include a restructuring charge of $7 million. The three and nine months ended September 30, 2013 include costs necessary to enable the separation of MHE and reduce our cost structure of $10 million and $64 million, respectively. The nine months ended September 30, 2013 also includes pre-tax legal settlements of approximately $77 million. | |||||||||||||||
See Note 2 — Acquisitions and Divestitures and Note 9 — Restructuring for additional actions that impacted the segment operating results. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Rental Expense and Lease Obligations | |
In December of 2003, we sold our 45% equity investment in Rock-McGraw, Inc., which owns our headquarters building in New York City, and remained an anchor tenant in our corporate headquarters building in New York City by concurrently leasing back space from the buyer through 2020. In December of 2013, we entered into an arrangement with the buyer to shorten the lease to December 2015 in exchange for approximately $60 million which was recorded as a reduction to the unrecognized deferred gain from the sale. The remaining gain is being amortized over the remaining lease term as a reduction in rent expense. | |
As of September 30, 2014, the remaining deferred gain was $28 million, as $6 million and $18 million was amortized during the three and nine months ended September 30, 2014, respectively. Interest expense associated with this operating lease was less than $1 million for the three months ended September 30, 2014 and approximately $1 million for the nine months ended September 30, 2014. | |
Legal & Regulatory Matters | |
In the normal course of business both in the United States and abroad, the Company, its subsidiary Standard & Poor’s Financial Services LLC (“S&P LLC”) and some of its other subsidiaries are defendants in numerous legal proceedings and are often the subject of government and regulatory proceedings, investigations and inquiries. Many of these proceedings, investigations and inquiries relate to the ratings activity of Standard & Poor’s Ratings Services (“S&P Ratings”) brought by issuers and alleged purchasers of rated securities. In addition, various government and self-regulatory agencies frequently make inquiries and conduct investigations into our compliance with applicable laws and regulations, including those related to ratings activities and antitrust matters. Any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions, which could adversely impact our consolidated financial condition, cash flows, business or competitive position. | |
The Company believes that it has meritorious defenses to the claims and potential claims in the matters described below and is diligently pursuing these defenses, and in some cases working to reach an acceptable negotiated resolution. However, in view of the uncertainty inherent in litigation and government and regulatory enforcement matters, we cannot predict the eventual outcome of these matters or the timing of their resolution, or in most cases reasonably estimate what the eventual judgments, damages, fines, penalties or impact of activity restrictions may be. As a result, we cannot provide assurance that the outcome of the matters described below will not have a material adverse effect on our consolidated financial condition, cash flows, business or competitive position. As litigation or the process to resolve pending matters progresses, as the case may be, we will continue to review the latest information available and assess our ability to predict the outcome of such matters and the effects, if any, on our consolidated financial condition, cash flows, business and competitive position, which may require that we record liabilities in the consolidated financial statements in future periods. | |
S&P Ratings | |
U.S. Department of Justice | |
In February 2013, the Civil Division of the U.S. Department of Justice filed a civil complaint in the U.S. District Court for the Central District of California against the Company and S&P LLC alleging violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 regarding ratings issued by S&P Ratings in the 2004-2007 time period relating to certain U.S. collateralized debt obligations and S&P Ratings models used in connection with rating certain structured finance products. The Court denied the Company and S&P LLC’s motion to dismiss the complaint in July 2013. Discovery in this case is ongoing. | |
State Attorneys General | |
Numerous actions have been brought against the Company and S&P LLC by the attorneys general of various states and the District of Columbia alleging a variety of causes of action relating to ratings activities of S&P Ratings. The Company and S&P LLC sought to remove most of these actions to federal court and to consolidate and transfer those actions to one federal court for all pretrial proceedings, and, in June 2013, the U.S. Judicial Panel on Multidistrict Litigation ordered those actions consolidated before the U.S. District Court for the Southern District of New York. The states moved to have the cases remanded to state court. The states’ motions were granted on June 3, 2014, and the cases are now proceeding in their respective state courts. Discovery in these cases is ongoing. | |
U.S. Securities and Exchange Commission | |
On July 22, 2014, S&P Ratings received a “Wells Notice” from the staff of the U.S. Securities and Exchange Commission (the “SEC”) stating that the staff had made a preliminary determination to recommend that the SEC institute an enforcement action against S&P Ratings, alleging violations of federal securities laws with respect to ratings issued in 2011 relating to certain commercial mortgage backed securities transactions, and public disclosure made by S&P Ratings regarding those ratings thereafter. In connection with the contemplated enforcement action, the staff may recommend that the SEC seek remedies that include a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and remedial sanctions such as revocation or suspension of S&P Ratings’ NRSRO registration. | |
S&P Ratings has been cooperating with the staff and is currently in active discussions to resolve matters pending before the SEC, some of which have also been the subject of investigations by the Attorneys General of New York and Massachusetts. S&P Ratings has not reached definitive settlement agreements with respect to these matters, and we cannot predict with certainty whether we will reach agreement, or the terms of any such agreement. During the three months ended September 30, 2014, we recorded a charge of $60 million relating to these matters. We can provide no assurance that S&P Ratings will not be obligated to pay additional amounts in order to resolve these matters on terms deemed acceptable. At this time, however, we are unable to reasonably estimate the range of such additional amounts, if any. | |
In September 2011, S&P Ratings received a “Wells Notice” from the staff of the SEC stating that the staff is considering recommending that the SEC institute a civil injunctive action against S&P Ratings alleging violations of federal securities laws with respect to ratings issued for a particular 2007 offering of collateralized debt obligations, known as “Delphinus CDO 2007-1.” On October 27, 2014, the Company received a notice from the staff of the SEC stating that they have concluded their investigation and do not intend to recommend an enforcement action against S&P Ratings with respect to this matter. | |
Prosecutor General of the Corte dei Conti | |
On January 15, 2014, S&P Ratings received notification of a potential claim by the Prosecutor General of the Corte dei Conti, an Italian administrative court, with respect to whether S&P Ratings’ downgrade of Italian sovereign debt in May 2011 wrongfully damaged Italy’s public finances and international reputation and whether S&P Ratings should pay compensation to Italy for the costs of Italian budget adjustments and for ancillary damages in an amount “not lower than” €234 billion. | |
Trani Prosecutorial Proceeding | |
The prosecutor in the Italian city of Trani is seeking criminal indictments against several current and former S&P Ratings managers and ratings analysts for alleged market manipulation, and against Standard & Poor’s Credit Market Services Europe under Italy’s vicarious liability statute, for having allegedly failed to properly supervise the ratings analysts and prevent them from committing market manipulation. The prosecutor’s theories are based on various actions by S&P Ratings taken with respect to Italian sovereign debt between May 2011 and January 2012. On October 28, 2014, the court granted the prosecutor’s request and issued indictments against the current and former S&P Ratings managers and ratings analysts, as well as Standard & Poor's Credit Market Services Europe. | |
Parmalat Litigation | |
In September and October 2005, writs of summons were served on The McGraw-Hill Companies, SRL and The McGraw-Hill Companies, SA in an action brought in the Tribunal of Milan, Italy by the Extraordinary Commissioner of Parmalat Finanziaria S.p.A. and Parmalat S.p.A. (collectively, “Parmalat”), claiming damages of €4.1 billion, representing the value of bonds issued by Parmalat which were rated investment grade by S&P Ratings, plus damages for S&P Ratings’ alleged complicity in aggravating Parmalat’s financial difficulties, among other claims. In June 2011, the Court dismissed Parmalat’s main damages claim based on the value of the bonds, and ordered the defendants to pay Parmalat approximately €0.8 million, representing ratings fees paid by Parmalat, plus interest and expenses. In September 2012, Parmalat appealed the judgment and, in November 2012, requested payment of the judgment in the amount of €1.1 million, which was paid in December 2012. On July 2, 2014, the Court of Appeals of Milan issued an order reopening the proceedings to allow the parties to submit additional pleadings. A hearing has been scheduled for October 29, 2014. | |
In a separate proceeding, the prosecutor’s office in Parma, Italy is conducting an investigation into the bankruptcy of Parmalat. In June 2006, the prosecutor’s office issued a Note of Completion of an Investigation concerning allegations that individual S&P Ratings analysts conspired with Parmalat insiders and ratings advisors to fraudulently or negligently cause the Parmalat bankruptcy. The Note of Completion was served on eight S&P Ratings analysts. While not a formal charge, the Note of Completion indicates the prosecutor’s intention that the named ratings analysts should appear before a judge in Parma for a preliminary hearing, at which hearing the judge will determine whether there is sufficient evidence against the ratings analysts to proceed to trial. No date has been set for the preliminary hearing. | |
Putative Class Action | |
In August 2007, a putative shareholder class action was filed in the U.S. District Court for the District of Columbia, and was subsequently transferred to the Southern District of New York. The Company and its former CEO and CFO were named as defendants in the suit, which alleged claims under the federal securities laws in connection with alleged misrepresentations and omissions made by the defendants relating to the Company’s earnings and S&P Ratings’ business practices. In April 2012, the Court granted the defendants’ motion to dismiss, and in December 2012, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal in its entirety. The plaintiffs sought to be relieved from the judgment dismissing the case and also sought permission to file an amended complaint. The Court denied these requests in their entirety in September 2013, and the Court’s decision was affirmed by the U.S. Court of Appeals on September 8, 2014. | |
Commodities & Commercial Markets | |
Platts | |
In May 2013, representatives from the European Commission (DG Competition, the EC’s antitrust office) commenced an unannounced inspection of Platts’ London offices in conjunction with potential anticompetitive conduct (in particular, in the crude oil, refined oil products and biofuels markets) relating to Platts’ Market On Close price assessment process. No allegations have been made against Platts at this time. There have also been several civil actions filed in the United States relating to potential anticompetitive behavior by market participants relating to Platts’ price assessment process, none of which have named Platts as a defendant. | |
McGraw Hill Construction | |
In October 2009, an action was filed in the U.S. District Court for the Southern District of New York in which Reed Construction Data asserted a number of claims under various state and federal laws against the Company relating to alleged misappropriation and unfair competition by McGraw Hill Construction and seeking an unspecified amount of damages. In September 2010, the Court granted the Company’s motion to dismiss some of the claims. On September 24, 2014, the Court granted summary judgment to the Company on all of Reed’s remaining claims with the exception of the unfair competition claim. On October 15, 2014, the parties submitted a joint stipulation to the Court agreeing to dismiss both Reed's unfair competition claim and the Company's counterclaims without prejudice to reinstatement in the event of a successful appeal of Reed's dismissed claims. |
Recent_Accounting_Standards
Recent Accounting Standards | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Standards | ' |
Recent Accounting Standards | |
In August of 2014, the Financial Accounting Standards Board (“FASB”) issued guidance that requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance is effective for reporting periods beginning after December 15, 2016, however, early adoption is permitted. We do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. | |
In May of 2014, the FASB and the International Accounting Standards Board (“IASB”) issued jointly a converged standard on the recognition of revenue from contracts with customers which is intended to improve the financial reporting of revenue and comparability of the top line in financial statements globally. The core principle of the new standard is for the recognition of revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced revenue disclosures, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. The amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently in the process of assessing the impact the adoption of this guidance will have on our consolidated financial statements. | |
In April of 2014, the FASB issued final guidance that raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The guidance is intended to reduce the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have or will have a major effect on an entity’s operations and financial results. In addition, the guidance permits companies to have continuing cash flows and significant continuing involvement with the disposed component. The FASB’s amended guidance is effective for our annual reporting period beginning January 1, 2015, however, early adoption is permitted. We do not expect the adoption of the guidance to have a significant impact on our consolidated financial statements. | |
In July of 2013, the FASB issued amended guidance that resolves the diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This new accounting guidance requires the netting of unrecognized tax benefits ("UTBs") against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. Under the new standard, UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The new standard requires prospective adoption but allows retrospective adoption for all periods presented. The amendments were effective on January 1, 2014, and the adoption of the guidance did not have a significant impact on our consolidated financial statements. | |
In March of 2013, the FASB issued amended guidance that resolves the diversity in practice for the accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity. The amended guidance requires that when a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity, the parent is required to release any related cumulative translation adjustment into net income in instances when a sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, the amended guidance clarifies that the sale of an investment in a foreign entity includes both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. In these instances, an entity is required to release the cumulative translation adjustment into net income. The amendments were effective on January 1, 2014, and the adoption of the guidance did not have a significant impact on our consolidated financial statements. |
Related_Party_Transactions_Not
Related Party Transactions (Notes) | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
On July 2, 2014, we entered into an aircraft purchase agreement with Harold W. McGraw III, Chairman of the Company's Board of Directors and former President and CEO of the Company ("Mr. McGraw"). On July 31, 2014, we completed the sale of the Company's aircraft for a purchase price of $20 million, which is modestly higher than the independent appraisal obtained. This transaction was approved by the Nominating and Corporate Governance Committee of the Company's Board of Directors after consultation with members of the Financial Policy Committee. During the three months ended June 30, 2014, we recorded a non-cash impairment charge of $6 million within other (income) loss in our consolidated statement of income as a result of the pending sale. | |
On June 25, 2014, we repurchased 0.5 million shares of the Company's common stock from the personal holdings of Mr. McGraw. The shares were purchased at a discount of 0.35% from the June 24, 2014 New York Stock Exchange closing price pursuant to a private transaction with Mr. McGraw. We repurchased these shares with cash for $41 million at an average price of $82.66 per share. This transaction was approved by the Nominating and Corporate Governance Committee of the Company's Board of Directors after consultation with members of the Financial Policy Committee. | |
In June of 2012, we entered into a new license agreement (the "License Agreement") with the holder of S&P Dow Jones Indices LLC noncontrolling interest, CME Group, which replaced the 2005 license agreement between S&P DJ Indices and CME Group. Under the terms of the License Agreement, S&P Dow Jones Indices LLC receives a share of the profits from the trading and clearing of CME Group's equity index products. During the three and nine months ended September 30, 2014, S&P Dow Jones Indices LLC earned $13 million and $38 million, respectively, of revenue under the terms of the License Agreement. The entire amount of this revenue is included in our consolidated statement of income and the portion related to the 27% noncontrolling interest is removed in net income attributable to noncontrolling interests. |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Acquisitions and Divestitures [Abstract] | ' | |||||||||||||||
Schedule of components of income and assets and liabilities from discontinued operations | ' | |||||||||||||||
The key components of income from discontinued operations for the periods ended September 30, 2014 and 2013 consist of the following: | ||||||||||||||||
(in millions) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | $ | 40 | $ | 43 | $ | 124 | $ | 397 | ||||||||
Expenses | 37 | 30 | 100 | 406 | ||||||||||||
Operating income (loss) | 3 | 13 | 24 | (9 | ) | |||||||||||
Interest expense, net | — | 1 | — | 2 | ||||||||||||
Income (loss) before taxes on income (loss) | 3 | 12 | 24 | (11 | ) | |||||||||||
Provision (benefit) for taxes on income (loss) | 1 | 5 | 9 | (5 | ) | |||||||||||
Income (loss) from discontinued operations, net of tax | 2 | 7 | 15 | (6 | ) | |||||||||||
Pre-tax (loss) gain on sale from discontinued operations | — | (32 | ) | — | 888 | |||||||||||
(Benefit) provision for taxes on income | — | (12 | ) | — | 296 | |||||||||||
(Gain) loss on sale of discontinued operations, net of tax | — | (20 | ) | — | 592 | |||||||||||
Discontinued operations, net | 2 | (13 | ) | 15 | 586 | |||||||||||
Less: net loss attributable to noncontrolling interests | — | — | — | 1 | ||||||||||||
Income (loss) from discontinued operations attributable to McGraw Hill Financial, Inc. common shareholders | $ | 2 | $ | (13 | ) | $ | 15 | $ | 587 | |||||||
The components of assets and liabilities held for sale related to McGraw Hill Construction in the consolidated balance sheets consist of the following: | ||||||||||||||||
(in millions) | 30-Sep-14 | 31-Dec-13 | ||||||||||||||
Accounts receivable, net | $ | 22 | $ | 30 | ||||||||||||
Goodwill | 3 | 3 | ||||||||||||||
Other assets | 2 | 3 | ||||||||||||||
Assets held for sale | $ | 27 | $ | 36 | ||||||||||||
Accounts payable and accrued expenses | $ | 9 | $ | 13 | ||||||||||||
Unearned revenue | 34 | 41 | ||||||||||||||
Liabilities held for sale | $ | 43 | $ | 54 | ||||||||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of debt | ' | |||||||
(in millions) | September 30, | December 31, | ||||||
2014 | 2013 | |||||||
5.9% Senior Notes, due 2017 1 | $ | 400 | $ | 400 | ||||
6.55% Senior Notes, due 2037 2 | 399 | 399 | ||||||
Long-term debt | $ | 799 | $ | 799 | ||||
1 | Interest payments are due semiannually on April 15 and October 15, and, as of September 30, 2014, the unamortized debt discount is less than $1 million. | |||||||
2 | Interest payments are due semiannually on May 15 and November 15, and, as of September 30, 2014, the unamortized debt discount is approximately $1 million. |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-based compensation for the periods ended September 30 is as follows: | ||||||||||||||||
(in millions) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Stock option expense | $ | 6 | $ | 4 | $ | 15 | $ | 9 | ||||||||
Restricted stock and unit awards expense | 20 | 21 | 57 | 61 | ||||||||||||
Total stock-based compensation expense | $ | 26 | $ | 25 | $ | 72 | $ | 70 | ||||||||
Equity_Tables
Equity (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Schedule of stock repurchases | ' | ||||||||||||||||
Share repurchases for the periods ended September 30 were as follows: | |||||||||||||||||
(in millions, except average price) | Three Months | Nine Months | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Total number of shares purchased 1, 2 | — | 6.4 | 4.4 | 15 | |||||||||||||
Average price paid per share 2 | $ | — | $ | 61.42 | $ | 79.06 | $ | 61.42 | |||||||||
Total cash utilized 3 | $ | — | $ | 350 | $ | 352 | $ | 850 | |||||||||
1 | The three and nine month periods ended September 30, 2013 includes shares received as part of our accelerated share repurchase agreements described in more detail below. | ||||||||||||||||
2 | On June 25, 2014, we repurchased 0.5 million shares of the Company's common stock from the personal holdings of Harold W. McGraw III, Chairman of the Company's Board of Directors and former President and CEO of the Company, at a discount of 0.35% from the June 24, 2014 New York Stock Exchange closing price. We repurchased these shares with cash for $41 million at an average price of $82.66 per share. See Note 13 — Related Party Transactions for further information. | ||||||||||||||||
3 | In December of 2013, 0.1 million shares were repurchased for approximately $10 million, which settled in January of 2014. Cash used for financing activities only reflects those shares which settled during the nine months ended September 30, 2014 resulting in $362 million of cash used to repurchase shares. | ||||||||||||||||
Schedule of redeemable noncontrolling interest | ' | ||||||||||||||||
Changes to redeemable noncontrolling interest during the nine months ended September 30, 2014 were as follows: | |||||||||||||||||
(in millions) | |||||||||||||||||
Balance as of December 31, 2013 | $ | 810 | |||||||||||||||
Net income attributable to noncontrolling interest | 69 | ||||||||||||||||
Distributions payable to noncontrolling interest | (65 | ) | |||||||||||||||
Redemption value adjustment | (4 | ) | |||||||||||||||
Balance as of September 30, 2014 | $ | 810 | |||||||||||||||
Schedule of changes in the components of accumulated other comprehensive loss | ' | ||||||||||||||||
The following table summarizes the changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2014: | |||||||||||||||||
(in millions) | Foreign Currency Translation Adjustment | Pension and Postretirement Benefit Plans | Unrealized Gain (Loss) on Forward Exchange Contracts | Accumulated Other Comprehensive Loss | |||||||||||||
Balance as of December 31, 2013 | $ | 23 | $ | (216 | ) | $ | (3 | ) | $ | (196 | ) | ||||||
Other comprehensive income before reclassifications | (55 | ) | (36 | ) | 3 | (88 | ) | ||||||||||
Reclassifications from accumulated other comprehensive loss to net earnings | — | 3 | 1 | — | 3 | ||||||||||||
Net other comprehensive income | (55 | ) | (33 | ) | 3 | (85 | ) | ||||||||||
Balance as of September 30, 2014 | $ | (32 | ) | $ | (249 | ) | $ | — | $ | (281 | ) | ||||||
1 | See Note 5 — Employee Benefits for additional details of items reclassed from accumulated other comprehensive loss to net earnings. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Schedule of calculation for basic and diluted EPS | ' | |||||||||||||||
The calculation for basic and diluted EPS for the periods ended September 30 is as follows: | ||||||||||||||||
(in millions, except per share amounts) | Three Months | Nine Months | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Amounts attributable to McGraw Hill Financial, Inc. common shareholders: | ||||||||||||||||
Income from continuing operations | $ | 188 | $ | 228 | $ | 716 | $ | 617 | ||||||||
Income (loss) from discontinued operations | 2 | (13 | ) | 15 | 587 | |||||||||||
Net income | $ | 190 | $ | 215 | $ | 731 | $ | 1,204 | ||||||||
Basic weighted-average number of common shares outstanding | 270.9 | 272.8 | 271.4 | 275.8 | ||||||||||||
Effect of stock options and other dilutive securities | 4.5 | 6 | 4.8 | 4.6 | ||||||||||||
Diluted weighted-average number of common shares outstanding | 275.4 | 278.8 | 276.2 | 280.4 | ||||||||||||
Earnings per share attributable to McGraw Hill Financial, Inc. common shareholders: | ||||||||||||||||
Income from continuing operations: | ||||||||||||||||
Basic | $ | 0.69 | $ | 0.83 | $ | 2.64 | $ | 2.24 | ||||||||
Diluted | $ | 0.68 | $ | 0.82 | $ | 2.59 | $ | 2.2 | ||||||||
Income from discontinued operations: | ||||||||||||||||
Basic | $ | 0.01 | $ | (0.05 | ) | $ | 0.05 | $ | 2.13 | |||||||
Diluted | $ | 0.01 | $ | (0.05 | ) | $ | 0.05 | $ | 2.09 | |||||||
Net income: | ||||||||||||||||
Basic | $ | 0.7 | $ | 0.79 | $ | 2.69 | $ | 4.36 | ||||||||
Diluted | $ | 0.69 | $ | 0.77 | $ | 2.64 | $ | 4.29 | ||||||||
Restructuring_Tables
Restructuring (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||
Schedule of initial restructuring charge recorded and the ending reserve balance | ' | |||||||||||||||
The initial restructuring charge recorded and the ending reserve balance as of September 30, 2014 by segment is as follows: | ||||||||||||||||
2014 Restructuring Plan | 2013 Restructuring Plan | |||||||||||||||
(in millions) | Initial Charge Recorded | Ending Reserve Balance | Initial Charge Recorded | Ending Reserve Balance | ||||||||||||
S&P Ratings | $ | 23 | 23 | $ | 13 | $ | 5 | |||||||||
S&P Capital IQ | 5 | 4 | 10 | 1 | ||||||||||||
C&C 1 | 15 | 15 | 10 | 2 | ||||||||||||
Corporate | 7 | 6 | 16 | 2 | ||||||||||||
Total | $ | 50 | $ | 48 | $ | 49 | $ | 10 | ||||||||
1 | The 2014 restructuring plan includes an initial charge of $3 million and an ending reserve balance of $2 million for McGraw Hill Construction. The 2013 restructuring plan includes an initial charge of $1 million and an ending reserve balance of less than $1 million for McGraw Hill Construction. |
Segment_and_Related_Informatio1
Segment and Related Information (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of operating results by segment | ' | |||||||||||||||
A summary of operating results by segment for the periods ended September 30 is as follows: | ||||||||||||||||
Three Months | 2014 | 2013 | ||||||||||||||
(in millions) | Revenue | Operating Profit | Revenue | Operating Profit | ||||||||||||
S&P Ratings | $ | 604 | $ | 183 | $ | 540 | $ | 230 | ||||||||
S&P Capital IQ | 311 | 64 | 293 | 50 | ||||||||||||
S&P DJ Indices | 143 | 86 | 124 | 77 | ||||||||||||
C&C 1 | 227 | 71 | 213 | 87 | ||||||||||||
Intersegment elimination 2 | (22 | ) | — | (18 | ) | — | ||||||||||
Total operating segments | 1,263 | 404 | 1,152 | 444 | ||||||||||||
Unallocated expense 3 | — | (38 | ) | — | (49 | ) | ||||||||||
Total | $ | 1,263 | $ | 366 | $ | 1,152 | $ | 395 | ||||||||
Nine Months | 2014 | 2013 | ||||||||||||||
(in millions) | Revenue | Operating Profit | Revenue | Operating Profit | ||||||||||||
S&P Ratings | $ | 1,837 | $ | 730 | $ | 1,701 | $ | 748 | ||||||||
S&P Capital IQ | 919 | 172 | 868 | 149 | ||||||||||||
S&P DJ Indices | 412 | 260 | 363 | 218 | ||||||||||||
C&C 1 | 657 | 217 | 621 | 214 | ||||||||||||
Intersegment elimination 2 | (64 | ) | — | (57 | ) | — | ||||||||||
Total operating segments | 3,761 | 1,379 | 3,496 | 1,329 | ||||||||||||
Unallocated expense 3 | — | (118 | ) | — | (242 | ) | ||||||||||
Total | $ | 3,761 | $ | 1,261 | $ | 3,496 | $ | 1,087 | ||||||||
1 | McGraw Hill Construction has historically been part of the C&C segment. In accordance with the presentation of McGraw Hill Construction as a discontinued operation, the results of operations, inclusive of corporate overhead allocations, for all periods presented have been reclassified out of C&C's results to reflect this change. See Note 2 — Acquisitions and Divestitures for further discussion. | |||||||||||||||
2 | Revenue for S&P Ratings and expenses for S&P Capital IQ include an intersegment royalty charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings. | |||||||||||||||
3 | The three and nine months ended September 30, 2014 include a restructuring charge of $7 million. The three and nine months ended September 30, 2013 include costs necessary to enable the separation of MHE and reduce our cost structure of $10 million and $64 million, respectively. The nine months ended September 30, 2013 also includes pre-tax legal settlements of approximately $77 million. |
Nature_of_Operations_and_Basis1
Nature of Operations and Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of reportable segments (in segments) | 4 |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures (Acquisitions) (Details) (USD $) | 1 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Jun. 30, 2014 |
Country | CRISIL Limited [Member] | CRISIL Limited [Member] | |||||
company | |||||||
Subsidiary or Equity Method Investee [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Minimum Number of Companies Represented in Broad Market Indices | 11,000 | ' | ' | ' | ' | ' | ' |
Minimum Number of Countries Represented in Broad Market Indices | 52 | ' | ' | ' | ' | ' | ' |
Sale of Stock, Percentage of Total Outstanding Equity Shares Offered for Purchase | ' | ' | ' | ' | ' | ' | 22.23% |
Sale of Stock, Number of Shares Issued in Transaction | ' | ' | ' | ' | ' | 11 | ' |
Sale of Stock, Percentage of Total Outstanding Equity Shares | ' | ' | ' | ' | ' | 15.07% | ' |
Sale of Stock, Consideration Received on Transaction | ' | ' | ' | ' | ' | $214 | ' |
Sale of Stock, Percentage of Ownership after Transaction | ' | ' | ' | ' | ' | 67.84% | ' |
Sale of Stock, Percentage of Ownership before Transaction | ' | ' | ' | ' | ' | 52.77% | ' |
Contingent consideration payment | ' | $11 | $12 | $11 | $12 | ' | ' |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures (Divestitures) (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 27, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 22, 2014 | Mar. 22, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Jul. 31, 2014 |
CRISIL Limited [Member] | Other (Income) Loss [Member] | Data Center [Member] | Data Center [Member] | McGraw Hill Construction [Member] | MHE [Member] | MHE [Member] | MHE [Member] | Harold W. McGraw III [Member] | |||||
India Index Services & Products Ltd [Member] | Other (Income) Loss [Member] | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-tax gain (loss) on dispositions | ' | ' | ($9) | $24 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 |
Non-cash impairment charge | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' |
Expected cash proceeds from sale of business | ' | ' | ' | ' | ' | ' | ' | ' | 320 | ' | ' | ' | ' |
Cash proceeds from sale of business | ' | ' | ' | ' | ' | ' | 58 | ' | ' | 2,400 | ' | ' | ' |
After-tax gain (loss) on sale of business | $0 | ($20) | $0 | $592 | ' | ' | ' | ($3) | ' | ' | $592 | $589 | ' |
Percent of equity interest sold | ' | ' | ' | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_and_Divestitures_3
Acquisitions and Divestitures (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Components of income from discontinued operations | ' | ' | ' | ' | ' |
Revenue | $40 | $43 | $124 | $397 | ' |
Expenses | 37 | 30 | 100 | 406 | ' |
Operating income (loss) | 3 | 13 | 24 | -9 | ' |
Interest expense, net | 0 | 1 | 0 | 2 | ' |
Income (loss) before taxes on income (loss) | 3 | 12 | 24 | -11 | ' |
Provision (benefit) for taxes on income (loss) | 1 | 5 | 9 | -5 | ' |
Income (loss) from discontinued operations, net of tax | 2 | 7 | 15 | -6 | ' |
Pre-tax (loss) gain on sale from discontinued operations | 0 | -32 | 0 | 888 | ' |
(Benefit) provision for taxes on income | 0 | -12 | 0 | 296 | ' |
(Gain) loss on sale of discontinued operations, net of tax | 0 | -20 | 0 | 592 | ' |
Discontinued operations, net | 2 | -13 | 15 | 586 | ' |
Less: net loss attributable to noncontrolling interests | 0 | 0 | 0 | 1 | ' |
Income (loss) from discontinued operations attributable to McGraw Hill Financial, Inc. common shareholders | 2 | -13 | 15 | 587 | ' |
Components of assets and liabilities classified as held for sale | ' | ' | ' | ' | ' |
Accounts receivable, net | 22 | ' | 22 | ' | 30 |
Goodwill | 3 | ' | 3 | ' | 3 |
Other assets | 2 | ' | 2 | ' | 3 |
Assets held for sale | 27 | ' | 27 | ' | 36 |
Accounts payable and accrued expenses | 9 | ' | 9 | ' | 13 |
Unearned revenue | 34 | ' | 34 | ' | 41 |
Liabilities held for sale | $43 | ' | $43 | ' | $54 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' |
Effective income tax rate | 39.20% | 32.40% | 35.10% | 33.60% | ' |
Unrecognized tax benefits | $93 | ' | $93 | ' | $82 |
Accrued interest and penalties associated with uncertain tax positions | $16 | ' | $16 | ' | $19 |
Debt_Details
Debt (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Long-term debt | $799 | $799 |
5.9% Senior Notes, due 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term debt | 400 | 400 |
Interest rate | 5.90% | 5.90% |
Unamortized debt discount on senior notes (less than $1 million for 5.9% Senior Notes) | 1 | ' |
6.55% Senior Notes, due 2037 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term debt | 399 | 399 |
Interest rate | 6.55% | 6.55% |
Unamortized debt discount on senior notes (less than $1 million for 5.9% Senior Notes) | $1 | ' |
Debt_Narrative_Details
Debt (Narrative) (Details) (USD $) | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Long-term debt fair value | ' | $860,000,000 | $801,000,000 | ' |
4 Year Facility | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Maximum borrowing capacity | ' | 1,000,000,000 | ' | 1,000,000,000 |
Term of facility | '4 years | ' | ' | ' |
Line of credit amount outstanding | ' | $0 | $0 | ' |
Commitment fee | ' | 0.20% | ' | ' |
Minimum | 4 Year Facility | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Commitment fee | ' | 0.20% | ' | ' |
Maximum | 4 Year Facility | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' |
Commitment fee | ' | 0.45% | ' | ' |
Indebtedness to cash flow | ' | 3.25 | ' | ' |
Employee_Benefits_Details
Employee Benefits (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Compensation and Retirement Disclosure [Abstract] | ' |
Contribution towards retirement plans | $13 |
Expected contributions towards of retirement plans | $10 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $26 | $25 | $72 | $70 |
Stock options | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 6 | 4 | 15 | 9 |
Granted (in shares) | ' | ' | 0.8 | ' |
Granted (in dollars per share) | ' | ' | $23.39 | ' |
Unrecognized compensation expense | 16 | ' | 16 | ' |
Unrecognized compensation expense, period for recognition | ' | ' | '2 years 3 months | ' |
Restricted stock and unit awards | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 20 | 21 | 57 | 61 |
Granted (in shares) | ' | ' | 0.7 | ' |
Granted (in dollars per share) | ' | ' | $77.81 | ' |
Unrecognized compensation expense | $88 | ' | $88 | ' |
Unrecognized compensation expense, period for recognition | ' | ' | '1 year 8 months | ' |
Equity_Schedule_of_stock_repur
Equity (Schedule of stock repurchases) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 25, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Harold W. McGraw III [Member] | 2013 Repurchase Program | 2013 Repurchase Program | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Total number of shares purchased (in shares) | 0 | 6.4 | 4.4 | 15 | 0.5 | 0.1 | ' |
Repurchase discount | ' | ' | ' | ' | 0.35% | ' | ' |
Average price paid per share (in dollars per share) | $0 | $61.42 | $79.06 | $61.42 | $82.66 | ' | ' |
Total cash utilized | $0 | $350 | $352 | $850 | $41 | $10 | $362 |
Equity_Narrative_Details
Equity (Narrative) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 3 Months Ended | 4 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 04, 2013 | Apr. 02, 2013 | Mar. 25, 2013 | Mar. 31, 2013 | Jul. 25, 2013 |
2013 Repurchase Program | 2013 Repurchase Program | Accelerated Share Repurchase Program | Accelerated Share Repurchase Program | Accelerated Share Repurchase Program | Accelerated Share Repurchase Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Stock repurchase program number of shares authorized to be repurchased (in shares) | ' | ' | 50,000,000 | ' | ' | ' | ' |
Maximum number of shares authorized for repurchase under stock repurchase plan as percentage of outstanding common stock | ' | ' | 18.00% | ' | ' | ' | ' |
Remaining shares available under repurchase program (in shares) | ' | 45,600,000 | ' | ' | ' | ' | ' |
Repurchase of additional shares (in shares) | ' | ' | ' | ' | $500 | ' | ' |
Shares received on initial delivery (in shares) | ' | ' | ' | ' | ' | 7,200,000 | ' |
Additional shares received (in shares) | ' | ' | ' | 1,400,000 | ' | ' | 700,000 |
Accelerated share repurchases, final price paid (in dollars per share) | ' | ' | ' | ' | ' | ' | $53.80 |
Accelerated share repurchases, cumulative shares repurchased (in shares) | ' | ' | ' | ' | ' | ' | 9,300,000 |
Interest in joint venture minimum percentage | 20.00% | ' | ' | ' | ' | ' | ' |
Agreement terms, change of control, put option for minority interest ownership, effective period | '15 days | ' | ' | ' | ' | ' | ' |
Equity_Schedule_of_redeemable_
Equity (Schedule of redeemable noncontrolling interest) (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Increase (Decrease) in Temporary Equity [Roll Forward] | ' |
Balance as of December 31, 2013 | $810 |
Net income attributable to noncontrolling interest | 69 |
Distributions payable to noncontrolling interest | -65 |
Redemption value adjustment | -4 |
Balance as of September 30, 2014 | $810 |
Equity_Accumulated_Other_Compr
Equity (Accumulated Other Comprehensive Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' | ' | ' |
Balance as of December 31, 2013 | ' | ' | ($196) | ' |
Other comprehensive income before reclassifications | ' | ' | -88 | ' |
Reclassifications from accumulated other comprehensive loss to net earnings | ' | ' | 3 | ' |
Net other comprehensive income | ' | ' | -85 | ' |
Balance as of September 30, 2014 | -281 | ' | -281 | ' |
Pension and other postretirement benefit plans, tax | 0 | -3 | 21 | 3 |
Foreign Currency Translation Adjustment | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' | ' | ' |
Balance as of December 31, 2013 | ' | ' | 23 | ' |
Other comprehensive income before reclassifications | ' | ' | -55 | ' |
Reclassifications from accumulated other comprehensive loss to net earnings | ' | ' | 0 | ' |
Net other comprehensive income | ' | ' | -55 | ' |
Balance as of September 30, 2014 | -32 | ' | -32 | ' |
Pension and Postretirement Benefit Plans | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' | ' | ' |
Balance as of December 31, 2013 | ' | ' | -216 | ' |
Other comprehensive income before reclassifications | ' | ' | -36 | ' |
Reclassifications from accumulated other comprehensive loss to net earnings | ' | ' | 3 | ' |
Net other comprehensive income | ' | ' | -33 | ' |
Balance as of September 30, 2014 | -249 | ' | -249 | ' |
Pension and other postretirement benefit plans, tax | ' | ' | 2 | ' |
Unrealized Gain (Loss) on Forward Exchange Contracts | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' | ' | ' |
Balance as of December 31, 2013 | ' | ' | -3 | ' |
Other comprehensive income before reclassifications | ' | ' | 3 | ' |
Reclassifications from accumulated other comprehensive loss to net earnings | ' | ' | 0 | ' |
Net other comprehensive income | ' | ' | 3 | ' |
Balance as of September 30, 2014 | $0 | ' | $0 | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Amounts attributable to McGraw Hill Financial, Inc. common shareholders: | ' | ' | ' | ' |
Income from continuing operations | $188 | $228 | $716 | $617 |
Income (loss) from discontinued operations | 2 | -13 | 15 | 587 |
Net income | $190 | $215 | $731 | $1,204 |
Basic weighted-average number of common shares outstanding (in shares) | 270.9 | 272.8 | 271.4 | 275.8 |
Effect of stock options and other dilutive securities (in shares) | 4.5 | 6 | 4.8 | 4.6 |
Diluted weighted-average number of common shares outstanding (in shares) | 275.4 | 278.8 | 276.2 | 280.4 |
Income from continuing operations: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.69 | $0.83 | $2.64 | $2.24 |
Diluted (in dollars per share) | $0.68 | $0.82 | $2.59 | $2.20 |
Income from discontinued operations: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.01 | ($0.05) | $0.05 | $2.13 |
Diluted (in dollars per share) | $0.01 | ($0.05) | $0.05 | $2.09 |
Net income: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.70 | $0.79 | $2.69 | $4.36 |
Diluted (in dollars per share) | $0.69 | $0.77 | $2.64 | $4.29 |
Restricted performance shares | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Outstanding shares not included in the computation of diluted earnings per share (in shares) | ' | ' | 1.4 | 0.9 |
Stock options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Outstanding shares not included in the computation of diluted earnings per share (in shares) | ' | 1.2 | ' | 2.7 |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2014 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | 2013 Restructuring Plan | |
position | S&P Ratings | S&P Capital IQ | C&C | C&C | Corporate | Total | Total | position | S&P Ratings | S&P Capital IQ | C&C | C&C | Corporate | Total | Total | |||
McGraw Hill Construction [Member] | McGraw Hill Construction [Member] | |||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Workforce reduction (in positions) | ' | 390 | ' | ' | ' | ' | ' | ' | ' | ' | 520 | ' | ' | ' | ' | ' | ' | ' |
Initial Charge Recorded | ' | ' | $23 | $5 | $15 | $3 | $7 | $50 | $50 | ' | ' | $13 | $10 | $10 | $1 | $16 | $49 | ' |
Ending Reserve Balance | ' | ' | 23 | 4 | 15 | 2 | 6 | 48 | 48 | ' | ' | 5 | 1 | 2 | 1 | 2 | 10 | 39 |
Restructuring charges paid | $2 | ' | ' | ' | ' | ' | ' | ' | ' | $29 | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_and_Related_Informatio2
Segment and Related Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Number of reportable segments (in segments) | ' | ' | 4 | ' |
Revenue | $1,263 | $1,152 | $3,761 | $3,496 |
Operating Profit | 366 | 395 | 1,261 | 1,087 |
S&P Ratings | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 604 | 540 | 1,837 | 1,701 |
Operating Profit | 183 | 230 | 730 | 748 |
S&P Capital IQ | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 311 | 293 | 919 | 868 |
Operating Profit | 64 | 50 | 172 | 149 |
S&P DJ Indices | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 143 | 124 | 412 | 363 |
Operating Profit | 86 | 77 | 260 | 218 |
C&C | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 227 | 213 | 657 | 621 |
Operating Profit | 71 | 87 | 217 | 214 |
Intersegment elimination | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | -22 | -18 | -64 | -57 |
Operating Profit | 0 | 0 | 0 | 0 |
Total | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 1,263 | 1,152 | 3,761 | 3,496 |
Operating Profit | 404 | 444 | 1,379 | 1,329 |
Unallocated expense | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 0 | 0 | 0 | 0 |
Operating Profit | -38 | -49 | -118 | -242 |
Initial Charge Recorded | 7 | ' | 7 | ' |
Growth and value plan | Unallocated expense | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Initial Charge Recorded | ' | 10 | ' | 64 |
Pre-tax legal settlements | Unallocated expense | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Initial Charge Recorded | ' | $77 | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2003 | Jan. 15, 2014 | Sep. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2006 | Oct. 31, 2005 | Sep. 30, 2014 | |
USD ($) | USD ($) | USD ($) | Italian Administrative Court [Member] | Parmalat [Member] | Parmalat [Member] | Parmalat [Member] | Parmalat [Member] | U.S. Securities and Exchange Commission [Member] | ||
EUR (€) | EUR (€) | EUR (€) | analysts | EUR (€) | USD ($) | |||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment ownership percentage | ' | ' | ' | 45.00% | ' | ' | ' | ' | ' | ' |
Deferred gain | $28,000,000 | $28,000,000 | $60,000,000 | ' | ' | ' | ' | ' | ' | ' |
Amortized deferred gain | 6,000,000 | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense (less than $1 million for three months ended September 30, 2014) | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss contingency charge recorded | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000,000 |
Damages claimed | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000,000 | ' |
Rating fees paid | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' |
Damages sought | ' | ' | ' | ' | € 234,000,000,000 | € 1,100,000 | ' | ' | ' | ' |
Number of analysts served | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jul. 31, 2014 | Jun. 25, 2014 | Jun. 25, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Other (Income) Loss [Member] | Mr. Terry McGraw [Member] | Mr. Terry McGraw [Member] | Harold W. McGraw III [Member] | CME Group | CME Group | |||||
S&P DJ Indices | S&P DJ Indices | |||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction amount | ' | ' | ' | ' | ' | $20 | ' | ' | ' | ' |
Non-cash impairment charge | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' |
Total number of shares purchased (in shares) | 0 | 6.4 | 4.4 | 15 | ' | ' | 0.5 | 0.5 | ' | ' |
Repurchase discount | ' | ' | ' | ' | ' | ' | 0.35% | 0.35% | ' | ' |
Total cash utilized | 0 | 350 | 352 | 850 | ' | ' | 41 | ' | ' | ' |
Average price paid per share (in dollars per share) | $0 | $61.42 | $79.06 | $61.42 | ' | ' | $82.66 | ' | ' | ' |
Revenues earned under license agreement | ' | ' | ' | ' | ' | ' | ' | ' | $13 | $38 |
Noncontrolling interest ownership by noncontrolling owners | ' | ' | ' | ' | ' | ' | ' | ' | 27.00% | 27.00% |