Investor Fact Book: Mcgraw-Hill Mcgraw-Hill

McGraw-Hill
Investor
Fact Book
2012
McGraw-Hill McGraw-Hill
Financial Education
Creating Two Powerful New Companies
Principal Executives Harold McGraw III
Chairman, President and
Chief Executive Officer
Corporate Operations
John L. Berisford Louis V. Eccleston
Executive Vice President President, S&P Capital IQ;
Human Resources Chairman, S&P Dow Jones Indices
Jack F. Callahan, Jr. Glenn S. Goldberg
Executive Vice President and President
Chief Financial Officer Commodities & Commercial Markets
D. Edward Smyth Douglas L. Peterson
Executive Vice President, President
Corporate Affairs and Standard & Poor’s Ratings Services
Executive Assistant to the Lloyd G. Waterhouse
Chairman and Chief Executive Officer President & CEO
Charles L. Teschner, Jr. McGraw-Hill Education
Executive Vice President
Global Strategy
Kenneth M. Vittor
Executive Vice President and
General Counsel
In Memoriam The 2012 Investor Fact Book is dedicated to the memory of our friend and
Donald S. Rubin colleague, Donald Rubin (1934 – 2012). Don was Senior Vice President of
1934 – 2012 Investor Relations at the time of his death, a position he held since 1993. He
served The McGraw-Hill Companies with excellence and the highest integrity
for 52 years and will always be remembered for his immense contribution
over that time. We relied so much on his good judgment as he consistently
represented the best interests of shareholders.
Don spoke with authority, reflecting his deep knowledge of the company.
Investors and analysts appreciated his witty, informative, and truthful insights
about McGraw-Hill and its markets. A journalist by training, Don applied his
craft to investor relations and created simple, powerful stories for investors.
One manifestation is the annual Investor Fact Book. From its modest beginnings
in 1984, the “Fact Book” flourished under Don’s leadership and, as a result, is
considered a trusted resource for insight into McGraw-Hill’s businesses,
markets, and prospects.
To honor Don’s legacy as a reporter and his outstanding contribution to

the company, The McGraw-Hill Companies established the Donald S. Rubin
McGraw-Hill Memorial Scholarship Fund at City University of New York’s
Graduate School of Journalism to inspire future generations of journalists.
McGraw-Hill
Growth and Value Plan

2–3 Creating Two Powerful New Companies
McGraw-Hill Financial McGraw-Hill Education

4–5 A Leader in Content and Analytics 28 – 29 A Leading Provider of Customized and
for the Global Capital, Commodities, Adaptive Digital Learning Solutions
and Commercial Markets
HIGHER EDUCATION, PROFESSIONAL
6–7 STANDARD & POOR’S RATINGS SERVICES AND INTERNATIONAL GROUP
8 – 11 Global Debt Markets 30 – 31 Digital Workflow Solutions for
12 Ratings Diversification Teaching and Learning
13 S&P CAPITAL IQ 32 Adaptive Learning Suite
14 Integrating New Capabilities into 33 Institutional Solutions
S&P Capital IQ’s Platform 34 – 35 Professional Markets
15 Enterprise Solutions SCHOOL EDUCATION GROUP
16 – 17 Desktop Solutions 36 – 37 K–12 Digital Solutions
18 Research & Analytics 38 – 39 Assessment and Reporting Market
19 S&P DOW JONES INDICES 40 – 41 Pre-K–16 Public Education: Funding,
20 – 21 Benchmarks Expenditures, and Enrollments
COMMODITIES 42 Growing Enrollments in Key
22 – 23 Platts Adoption States
COMMERCIAL MARKETS
43 Pre-K–12 Market Sales
24 J.D. Power and Associates 44 – 45 Elementary and Secondary School
State Adoption Schedules
25 McGraw-Hill Construction
26 Aviation Week
Eleven-Year Financial Review

47 The McGraw-Hill Companies 56 Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
48 Free Cash Flow | Net Debt to EBITDA |
Cash Returned to Shareholders 57 Capital Investments: Investments,
Depreciation, and Amortization
49 Consolidated Profit and Loss
58 – 59 Acquisitions and Divestitures
50 Operating Segments at a Glance
60 – 61 Advancing Total Shareholder Value:
51 Quarterly Results: 2011 vs. 2010 Dividend Record | Share Repurchase and
52 – 53 Operating Segment Trends Stock History | Debt Profile
54 – 55 Expanding Globally: Foreign Source 62 – 63 Items Affecting Comparability of Results

Revenue by Segment
Ticker Symbol NYSE: MHP 2012 Investor Fact Book 1

McGraw-Hill Growth and Value Plan
Creating Two Powerful New Companies
2012 will be remembered as an inflection point in The McGraw-Hill Companies’ history.
It will mark the culmination of the Company’s Growth and Value Plan that was announced
in September 2011. This plan was the result of an extensive review in which the Board
of Directors determined that the creation of two independent companies is the best and
most reliable way to generate superior shareholder value. The centerpiece of the plan
is the creation of two powerful new companies:
McGraw-Hill McGraw-Hill The separation is

on track to occur by
Financial Education the end of 2012
A leader in content and A leading provider Advancing the

analytics for the global of customized and Growth and
Value Plan
capital, commodities, adaptive digital
The Growth and Value Plan
and commercial markets learning solutions includes several elements:
Separation
New operating models
The separation will provide each company with Cost reduction
opportunities and benefits:
Share repurchases
Funding both organic growth and
Strategic Focus tuck-in acquisitions
Allow each independent company to design and
implement corporate strategies and policies that are
based on the industries that each serves and its
specific business characteristics, including customers,
sales cycles, and product life cycles.
Access to Capital
Remove the need for the businesses to compete
internally for capital. Instead, each company will
have direct access to the capital markets to fund
its respective growth strategies and to establish
an appropriate capital structure for its particular
business needs.
Strategic Flexibility
Provide each independent company increased
strategic flexibility to make acquisitions and form
partnerships and alliances in its target markets, and
allow each company to fund future acquisitions,
the value of which will be more closely aligned with
the performance of its businesses.
Investor Choice
Provide investors in each company with a more
targeted investment opportunity with distinct
investment and business characteristics, including
different opportunities for growth, capital structure,
business models, and financial returns.
2 McGraw-Hill
Overview
McGraw-Hill Financial McGraw-Hill Education

A leading provider of content and analytics to the A leading provider of customized and adaptive digital
capital, commodities, and commercial markets, learning solutions, McGraw-Hill Education is the
McGraw-Hill Financial will build on its specialized second-largest global education company in the world.
market knowledge to create integrated solutions to McGraw-Hill Education will leverage its rich history
meet emerging customer needs. McGraw-Hill and digital capabilities to thrive as a stand-alone
Financial will be a focused operating company and company and will be reported in two business lines:
will be reported in five business lines:
Higher Education, Professional and
Standard & Poor’s Ratings Services International Group
S&P Capital IQ School Education Group
S&P Dow Jones Indices McGraw-Hill Education will drive growth by aligning
its capabilities with key market trends and improve
Commodities profitability by optimizing its core business. To
Commercial Markets achieve these goals, McGraw-Hill Education will
strive to:
Growth at McGraw-Hill Financial is expected to
come from the continued strong performance of its Drive Operational Excellence: Optimize its
core business for profitability
well-known brands, targeted acquisitions and
alliances, and incremental growth stemming from Reimagine Learning: Focus primarily on digital,
data-enablement, and services to improve
its ability to capitalize on industry trends which are student learning and success
increasing customer needs for integrated solutions
across asset classes. Capture Growth Opportunities: Leverage
expertise as a content and learning company
McGraw-Hill Financial plans to focus on the to capture global opportunities as well as to
grow in adjacent markets, and market spaces
following opportunities: in between traditional education, such as
Integrated Solutions: Provide integrated solu- career readiness
tions within and across market segments
The actions McGraw-Hill Education is taking to
Distribution: Capture additional revenue by reduce costs and streamline its operational structure
leveraging and expanding its strong channel
relationships will enable aggressive pursuit of a strategy that
focuses on high-growth opportunities in digital
Geographic Penetration: Use its vast global
footprint to capitalize on opportunities in ma- learning and education services. By lowering its cost
ture and growing markets base while maintaining strong cash flow from
operations, McGraw-Hill Education will capitalize on
Scalable Capabilities: Create and leverage
efficiency and effectiveness through common secular shifts in the education market and maximize
platforms, processes, and standards return on invested capital.
2012 Investor Fact Book 3

McGraw-Hill Financial
The newly named McGraw-Hill Financial is positioned as a leader in the
world’s capital, commodities, and commercial markets. Its brands
include Standard & Poor’s Ratings Services, S&P Dow Jones Indices(1),
S&P Capital IQ, Platts, J.D. Power and Associates, McGraw-Hill
Construction, and Aviation Week.
A Foundation for Growth
McGraw-Hill Financial is creating a scalable business with a strong

trajectory for future growth. Its unique offerings will further integrate
content, analytics, and other value-added products, services, and
solutions for customers across the world.
2011 2012+
Built foundation for Clear operating Scalable operating

future growth model, execution model to allow for
Realigned S&P Capital IQ/ framework, and meaningful growth
S&P Indices to unlock integrated team Proven operating model
value by integrating that can scale organi-
Operating with a clear
financial information, cally and can also utilize
focus on leveraging scale,
data, and analytics to unique capabilities from
improving and integrating
deliver a suite of products strategic acquisitions
vertical operations, and
across asset classes
combining deep content
expertise to create new
solutions for customers
$4 Billion Pro-forma 2011 Revenue
McGraw-Hill Financial Global Serves Capitalizes

(dollars in millions) industry interconnected on global
leader markets growth trends
Standard & Poor’s Ratings
Services $1,767.0
Provides high-value Capital markets Globalization
benchmarks, of capital and
Commodities
S&P Capital IQ $1,031.0 information, data, commodities
markets
and solutions markets and
Commercial markets industries; rise in
S&P Indices(1) $323.0 Catalyst for markets data-driven decision
making; increased
Commodities $419.0 focus on managing
volatility and risk
Commercial Markets $477.0 Expand global
footprint, including
in high-growth
(1) The S&P Dow Jones Indices joint venture was launched on June 29, 2012 BRIC countries
Note: Pro-forma 2011 revenue is not intended to represent what the results for the new
(Brazil, Russia, India,
McGraw-Hill Financial would have been had the separation already occurred and China)
4 McGraw-Hill
McGraw-HIll Financial
McGraw-Hill Financial A leading provider of content and analytics, delivering integrated

solutions through iconic brands and interconnected markets
Standard & S&P Capital IQ S&P Dow Commodities Commercial
Poor’s Ratings Multi-asset class Jones Indices(1) Provider of energy, Markets
Services data, research, Maintains a variety petrochemicals, and Leading brands
benchmarks, and of investable and metals information in key markets
Credit ratings, analytics through Platts
research, and benchmark indices through J.D. Power
analytics and Associates,
McGraw-Hill
Construction, and
Aviation Week
McGraw-Hill Financial will accelerate growth by Recurring Revenue:

expanding cross-business synergies: An Important Value Driver
Non-Transaction and Transaction
Integrated Solutions
Standard & Poor’s Ratings Services
Provide integrated solutions within and differentiates its revenue between
across market segments that fill evolving non-transactional and transactional
customer needs
Quantitatively derived credit ratings have been created by (dollars in millions) 2011
S&P Capital IQ from Standard & Poor’s Ratings’ historical Non-transaction(a, b) $ 1,116.0
data to drive credit analysis by clients Transaction(c) $ 651.0
Total $ 1,767.0
Distribution
Capture additional revenue by leveraging Subscription and Non-Subscription
and expanding strong channel relationships S&P Capital IQ, S&P Indices,
(proprietary, channel partners, direct data Commodities, and Commercial
feeds, and Internet and third-party networks) Markets differentiate their
revenue between subscription
Unique distribution arrangements to carry ratings and and non-subscription
research across business units
S&P Capital IQ/S&P Indices
S&P Indices and Platts jointly negotiated new contracts (dollars in millions) 2011
in 2011 with the CME Group to align economic Subscription(d) $ 994.0
incentives and encourage new product development Non-subscription(e) $ 360.0
Total $ 1,354.0
Geographic Expansion
Use vast global footprint to capitalize on Commodities & Commercial Markets
opportunities in mature and growth markets (dollars in millions) 2011
S&P Capital IQ, S&P Dow Jones Indices, and Platts Subscription(f) $ 562.0
utilize Standard & Poor’s Ratings Services’ global Non-subscription(g) $ 334.0
presence and infrastructure Total $ 896.0
(a) Revenue primarily related to annual fees for frequent

Scalable Capabilities issuer programs and surveillance
(b) Includes intersegment royalty revenue from S&P
Create and leverage efficiency and effective- Capital IQ/S&P Indices of $63 million
ness through common platforms, processes, (c) Revenue related to ratings of publicly-issued debt,
bank loan ratings, and corporate credit estimates
and standards (d) Revenue related to credit ratings-related informa-
tion products, S&P Capital IQ platform, investment
CRISIL and S&P Capital IQ have created intellectual research products, and other data subscriptions
property with strength in financial data collection (e) Revenue related to fees based on assets underlying
exchange-traded funds, as well as certain advisory,
and analytical support that is scalable and can be pricing, and analytical services
commercialized (f) Revenue related to Platts’ real-time news, market
data and price assessments, along with other print
and digital information products primarily serving
the energy, automotive, construction, aerospace and
defense markets
(g) Revenue related to syndicated and proprietary research
studies, advertising, consulting engagements and events

STANDARD & POOR’S RATINGS SERVICES
Expanding World of Standard & Poor’s Ratings Services
Credit Ratings, Research, Standard & Poor’s Ratings Services is a leading provider of
Analytics credit ratings, research, and analytics. As part of the world’s
financial infrastructure, Standard & Poor’s plays a vital role
in bringing transparency and comparability to the financial
markets, helping investors and others measure and mitigate
credit risk.
Standard & Poor’s

Global Footprint
FinanceAsia named Standard & Poor’s the
Standard & Poor’s was approved as “Most Influential Credit Rating Agency” in the
Thought Leadership region in 2011 for the 11th consecutive year
Reports & Forums a registered credit rating agency in
the European Union in 2011
The Credit Overhang Asia-Pacific: Global Standard & Poor’s India-based credit rating
Series Risks Could Eclipse The Asset named Standard & Poor’s agency, CRISIL, completed the acquisition
Economic Growth In ”Best Rating Agency for Islamic Finance” of Coalition Development Ltd. in 2012
Global Economic 2012
Outlook: Growing
Pains 2012: Will Greece Standard & Poor’s acquired a 5% stake
Standard & Poor’s acquired a
The Dodd-Frank Act Exit the Eurozone? in the parent company of TRIS Ratings
4.9% stake in RAM Holdings, the
Two Years Later Co. Ltd., Thailand’s leading credit
The Pension Funding leading local rating agency in
agency, in 2011
Pinch Malaysia, in 2011
Insurance 2012:
Investing in a Global
2012 Housing
Industry
Conference—A New
28th Annual Foundation: Different Standard & Poor’s Ratings
Insurance Fundamentals for Services has more than 1,400
Conference Housing Finance
analysts in 23 countries Standard & Poor’s office Standard & Poor’s affiliate
Mobile Access to Standard & Standard & Poor’s CreditMatters’ mobile, interactive offerings keep
portfolio managers, credit officers, risk managers, and professionals
Poor’s Global Perspective on current on Standard & Poor’s global perspective regarding important
Credit Market Developments credit market developments, including the latest rating actions, news,
and commentary. Offerings include:
CreditMatters Mobile CreditMatters eReports CreditMatters Multimedia

CreditMatters Mobile is a new app CreditMatters eReports are interactive CreditMatters Multimedia features
that provides an easy way to keep magazines designed for the iPad and video interviews with Standard &
up with Standard & Poor’s global the Web. They deliver articles, video, Poor’s rating analysts and provides
perspective on key credit market audio, charts, and other related extensive coverage on current topics
developments materials from Standard & Poor’s in finance, credit markets, and the
global team of rating analysts and can global economy
be downloaded for offline viewing
www.standardandpoors.com/mobile http://www.standardandpoors.com/ereports http://video.standardandpoors.com/
6 McGraw-Hill
Providing Valued Research and With more than 1,400 credit Standard & Poor’s publishes
analysts in 23 countries, and more than a million credit ratings
Opinions for Market Participants more than 150 years’ experience on debt issued by sovereign,
assessing credit risk, Standard & municipal, corporate, and financial
Poor’s Ratings Services offers sector entities. Ratings will
a unique combination of global continue to play a strong role
coverage and local insight. as bond issuance grows and
Standard & Poor’s research and alternative lenders and investment
opinions about relative credit risk managers increase their presence
provide market participants with in the capital markets. Standard &
information and independent Poor’s goal is to become the
benchmarks that help to support leading provider of global credit
the growth of transparent, liquid benchmarks and research across
debt markets worldwide. industries, asset classes, and
geographies that investors,
Over the past few years, Standard
businesses, and markets use to
& Poor’s has strengthened its
foster economic development
ratings process to make it even
and growth around the world.
more transparent. Since 2009,
Standard & Poor’s offers a unique combination of Standard & Poor’s has invested
global coverage and local insight more than $200 million in
systems, training, and analytics to www. standardandpoors.com
enhance the quality of its ratings.
Globally, Standard & Poor’s rated nearly
$3.5 trillion in new debt in 2011
Standard & Poor’s Ratings Track Record: Meeting the Test of Time
What is a Standard & Poor’s How Standard Global Corporate Average Cumulative Default Rates (1981–2011) (%) (a)
credit rating? & Poor’s ratings
Time horizon (years)
perform:
Rating 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Credit ratings are opinions about The tables (right) AAA 0.00 0.03 0.14 0.25 0.37 0.49 0.55 0.64 0.71 0.78 0.81 0.85 0.89 0.97 1.06
credit risk. Standard & Poor’s show the default AA 0.02 0.07 0.14 0.26 0.37 0.49 0.60 0.69 0.77 0.86 0.94 1.01 1.09 1.17 1.23
ratings express an opinion about rates experienced A 0.08 0.18 0.32 0.48 0.66 0.86 1.10 1.31 1.53 1.77 1.97 2.14 2.30 2.45 2.66
for each rating BBB 0.24 0.67 1.13 1.71 2.30 2.88 3.38 3.88 4.38 4.88 5.41 5.85 6.30 6.76 7.22
the ability and willingness of an category over BB 0.90 2.70 4.80 6.80 8.61 10.34 11.85 13.21 14.49 15.59 16.49 17.29 17.97 18.55 19.24
issuer to meet its financial obliga- 30 years. B 4.48 9.95 14.57 18.15 20.83 23.00 24.76 26.19 27.46 28.70 29.77 30.65 31.47 32.22 33.01
tions in full and on time. Credit For example: CCC/C 26.82 35.84 41.14 44.27 46.72 47.82 48.79 49.66 50.77 51.65 52.42 53.28 54.24 55.13 55.13
ratings can also speak to the credit Investment-grade 0.12 0.33 0.57 0.86 1.17 1.47 1.76 2.03 2.30 2.57 2.82 3.04 3.25 3.46 3.69
quality of an individual debt issue, The 5-year cumulative
Speculative-grade 4.21 8.23 11.74 14.56 16.82 18.72 20.31 21.68 22.93 24.08 25.06 25.89 26.65 27.33 28.03
default rate for
and the relative likelihood that the corporate bonds
All rated 1.57 3.10 4.47 5.62 6.58 7.41 8.12 8.73 9.30 9.83 10.29 10.68 11.05 11.38 11.74
issue may default. rated AAA has been Source: Standard & Poor’s “Default, Transition and Recovery: 2011 Annual Global Corporate
Default Study and Ratings Transitions,” March 21, 2012
0.37%, or fewer than
four defaults for
every 1,000 ratings Global Structured Finance Cumulative
The 5-year cumula- Default Rates Conditional on Survival, 1978–2011 (%) (b)
tive default rate for Time horizon (years)
AAA-rated structured Rating 1 2 3 4 5 6 7 8 9 10
finance issues has AAA 0.12 0.55 1.38 2.40 3.02 3.31 3.44 3.55 3.64 3.72
been 3.02% AA 0.31 2.73 6.71 9.97 11.96 13.00 13.37 13.57 13.73 13.85
A 0.60 4.39 9.55 13.39 15.89 17.36 18.09 18.48 18.74 18.99
BBB 1.41 7.62 15.04 21.05 25.39 28.25 29.96 30.98 31.78 32.37
The default rate tables under- (a) Average cumulative
BB 3.21 13.34 22.64 30.51 35.84 39.70 42.48 44.29 45.85 47.12 default rates are derived
score a key point: Over time, B 8.06 23.55 35.52 45.38 52.22 57.04 60.66 62.95 64.66 65.68 by calculating “conditional
the higher the Standard & CCC/C 37.76 57.77 72.26 76.69 79.55 81.79 83.45 85.16 86.15 86.35 on survival” marginal
default rates from
Poor’s rating, the fewer the Investment-grade 0.54 3.39 7.28 10.44 12.52 13.72 14.31 14.63 14.86 15.03 experiences of each static
Speculative-grade 19.18 33.88 43.97 50.81 55.49 58.89 61.43 63.13 64.46 65.35 pool and time horizon
incidents of default All rated 5.14 10.56 15.53 19.25 21.72 23.27 24.17 24.71 25.08 25.34 (b) AAA ratings from the same
transaction are treated
Source: Standard & Poor’s “Default Study: Global Structured Finance Default Study, 1978-2011: as a single rating in the
Credit Quality Fell For The Fifth Consecutive Year In 2011,” March 22, 2012 calculation of this table

Global Debt Markets
U.S. and European Corporate Debt U.S. Debt Market

Maturing: 2012*–2016
In 2011, Standard & Poor’s rated approximately 88% of
Standard & Poor’s Ratings Services estimates that the $1.2 trillion of addressable debt issued in the U.S.
there is more than $7 trillion in rated corporate debt market compared to 90% of the addressable market
coming due between the second quarter of 2012 in 2010. Overall, rated debt issuance by dollar volume
and the end of 2016 for U.S. and European compa- in the U.S. fell approximately 14% from 2010 to 2011,
nies. Debt maturities are expected to range from while the number of issues fell by approximately 27%.
$1.3 trillion to nearly $2.0 trillion per annum between
The rated debt market is a component of the total
2013 and 2016. Of the total, U.S. companies repre-
debt market and includes only the debt securities
sent 41% and European companies represent 59%.
issued with a rating. The rated U.S. debt market
Investment-grade debt represents 77% of the total,
chart (shown below) is primarily comprised of five
with 23% in speculative-grade debt.
new-issue categories: (1) Corporates; (2) Municipals;
Financial companies represent more than $4 trillion, or approximately (3) Mortgage-Backed Securities (Residential Mort-
60% of the total corporate debt for U.S. and Europe. In the United gage-Backed Securities and Commercial Mortgage-
States, financial issuers account for approximately $1 trillion in bonds Backed Securities); (4) Asset-Backed Securities; and
and loans maturing between mid-year 2012 and 2016. In 2013 and
2014, maturing debt for European companies will total about $1 trillion (5) Collateralized Debt Obligations.
and $1.3 trillion, respectively.
Nonfinancial companies represent $2.8 trillion, or approximately 40%,
of the total $7 trillion of maturing debt from the United States (annual figures; dollar volume in billions; data by domicile of issuer/assets)
and Europe.
Rated U.S. Debt Market (a, b, c, d, e)
S&P penetration rate as a % of rated dollar volume
U.S. and Europe: Corporate Debt Maturing $3,500

by Year (2012*-2016) (dollars in billions) 92% 94%
2,625
$2,000
1,750
1,500 95%
94% 90%
875 88%
1,000 ‘10
‘06 ‘07 ‘08 ‘09 ‘11
S&P Rated Volume $3,072 $2,885 $1,413 $1,439 $1,234 $1,046
500
‘12 ‘13 ‘14 ‘15 ‘16 Rated Volume $3,331 $3,076 $1,508 $1,522 $1,376 $1,188
Investment Grade $ 795.1 $1,284.0 $1,591.5 $ 975.3 $ 872.2 # of Rated Issues 15,510 14,488 10,367 11,616 14,194 10,404
Speculative Grade 142.5 333.1 386.9 345.4 405.0 Source: Thomson Reuters, Harrison Scott Publications, Standard & Poor's
Total U.S. and Europe $ 937.6 $1,617.1 $1,978.4 $ 1,320.7 $ 1,277.2
(dollars in billions) 2012* 2013 2014 2015 2016

United States
Financial
Investment grade $ 254.3 $ 196.9 $ 195.6 $ 154.1 $ 157.5
Speculative grade 18.7 14.8 16.4 19.6 15.9
Nonfinancial
Total United States $ 430.5 $ 583.0 $ 699.6 $ 587.4 $ 645.2
Europe
Financial
Nonfinancial
Total Europe $ 507.1 $1,034.1 $1,278.7 $ 733.3 $ 632.0
Sources: S&P Capital IQ and Standard & Poor’s Global Fixed Income Research
* Debt maturing on May 29, 2012, through Dec. 31, 2012. Data as of May 28, 2012.
Includes bonds, loans, and revolving credit facilities
Note: Details may not sum to total due to rounding
Studies for emerging markets and other developed markets, including Asia,
Australia, Canada, Japan, and New Zealand, were not available at the time the
2012 Investor Fact Book was issued. These markets represent approximately
15% of the global corporate debt market
8 McGraw-Hill
Corporates (c) Commercial Mortgage-Backed Securities (CMBS) (b)

S&P penetration rate as a % of rated dollar volume S&P penetration rate as a % of rated dollar volume
$1,500 $300
1,125 225
96% 88%
94% 99% 82%
750 96% 150
95% 97% 93% 44% 40% 23%
375 75 ‘08 ‘09 ‘10 ‘11
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07
S&P Rated Volume $924 $1,062 $746 $853 $664 $660 S&P Rated Volume $184 $210 $15 $3 $7 $7
Rated Volume $979 $1,110 $779 $861 $697 $679 Rated Volume $225 $240 $16 $7 $18 $32
# of Rated Issues 2,102 1,858 889 1,057 1,300 1,109 # of Rated Issues 151 120 13 25 41 37
Source: Thomson Reuters, Standard & Poor’s Source: Harrison Scott Publications, Standard & Poor’s
Municipals (a) Asset-Backed Securities (ABS) (b,e)

$500 $300
98% 98%
91% 89%
375 85% 88% 225 98%
84%
250 87% 150
86%
77% 63%
125 75
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
S&P Rated Volume $321 $371 $370 $410 $416 $273 S&P Rated Volume $264 $279 $222 $124 $100 $79
Rated Volume $381 $438 $421 $450 $468 $312 Rated Volume $270 $284 $227 $144 $130 $125
# of Rated Issues 10,137 10,056 9,022 10,189 12,353 8,899 # of Rated Issues 433 393 243 186 243 233
Source: Thomson Reuters, Standard & Poor’s Source: Harrison Scott Publications, Standard & Poor's
Residential Mortgage-Backed Securities (RMBS) (b, d) Collateralized Debt Obligations (CDOs) (b)
$1,500 $340
98% 98%
1,125 255
92%
750 170
95% 85% 85% 57% 21% 97% 63% 97% 93%
375 85 ‘08 ‘09 ‘10 ‘11
‘08 ‘09 ‘10 ‘11
‘06 ‘07 ‘06 ‘07
S&P Rated Volume $1,060 $641 $27 $45 $19 $3 S&P Rated Volume $319 $321 $33 $4 $29 $24
Rated Volume $1,151 $676 $32 $53 $33 $15 Rated Volume $325 $328 $34 $6 $30 $26
# of Rated Issues 1,854 1,134 101 135 130 48 # of Rated Issues 833 927 99 24 127 78
Source: Harrison Scott Publications, Standard & Poor’s Source: Harrison Scott Publications, Standard & Poor's
Notes for debt issuance:

(a) Excludes municipal student loans and private placements
(b) Excludes confidential transactions
(c) Includes industrial and financial services issuers. Also includes Rule 144a (private
placements), MTN takedowns, convertibles, and preferred stocks. Excludes sovereign
issuers, private placements (except Rule 144a issues), retail notes, commercial paper,
and all agency issues
(d) Excludes agency deals. Includes home equity loans
(e) Excludes asset-backed commercial paper and letters of credit
Global Debt Markets (continued)
European Region Debt Market

In 2011, Standard & Poor’s rated approximately 69%
European Corporates (b,e)
of the $1.6 trillion of addressable debt issued in the S&P penetration rate as a % of rated dollar volume
European market, which includes the Middle East
and Africa, compared to 83% in 2010. Overall, rated $1,500
93%
debt issuance by dollar volume in the region grew 1,125
approximately 11% from 2010 to 2011, while the 83% 87% 91% 90%
number of issues grew by 8%. 750 90%
The rated debt market is a component of the total 375

debt market and includes only the debt securities ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
issued with a rating. The rated European debt market S&P Rated Volume $ 965 $ 941 $873 $1,354 $835 $762
chart (shown below) is comprised of five new-issue Rated Volume $1,165 $1,084 $962 $1,453 $926 $845
# of Rated Issues 3,305 2,998 1,988 1,967 2,199 1,862
categories: (1) Corporates; (2) Mortgage-Backed
Source: Thomson Reuters, Standard & Poor’s
Securities (Residential Mortgage-Backed Securities
and Commercial Mortgage-Backed Securities);
(3) Asset-Backed Securities; (4) Collateralized Debt
Obligations; and (5) Covered Bonds.
(annual figures; dollar volume in billions; data by domicile of issuer/assets)
Rated European Debt Market (a,e) European Residential Mortgage-Backed Securities (RMBS) (a,d,e)
$2,500 $400
1,875 82% 300

83% 83%
89% 62%
1,250 83% 83% 200 52% 74%
69% 74% 75%
‘08 ‘09
625 100
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘10 ‘11
S&P Rated Volume $1,593 $1,790 $1,224 $1,547 $1,222 $1,137 S&P Rated Volume $273 $246 $32 $ 8 $ 74 $89
Rated Volume $1,920 $2,184 $1,469 $1,736 $1,478 $1,636 Rated Volume $328 $399 $62 $11 $101 $119
# of Rated Issues 4,727 4,512 2,694 2,359 2,886 3,212 # of Rated Issues 255 210 64 7 48 46
Source: Thomson Reuters, Harrison Scott Publications, Standard & Poor's Source: Harrison Scott Publications, Standard & Poor’s
European Commercial Mortgage-Backed Securities (CMBS) (a,e)

S&P penetration rate as a % of rated dollar volume
$100
75 94%
50 85%
70% 72% 42% 42%
25 ‘08 ‘09 ‘10 ‘11
‘06 ‘07
S&P Rated Volume $76 $55 $1 $2 $3 $2
Rated Volume $81 $65 $2 $2 $6 $4
# of Rated Issues 85 59 7 6 10 3
Source: Harrison Scott Publications, Standard & Poor’s
10 McGraw-Hill
Asia-Pacific Region Debt Market

In 2011, rated debt issue volume for corporates in
European Asset-Backed Securities (ABS) (a,c,e)
S&P penetration rate as a % of rated dollar volume Asia was $224 billion, down 6% from 2010. Standard
& Poor’s 2011 market penetration was 82% for
$140 corporates, compared to 83% in 2010. For structured
105
finance, rated issuance was up 48% from 2010,
81% and Standard & Poor’s rated approximately 69% of
79%
70 54% that volume, down from 78% in 2010.
68% 63% 52%
35 ‘09
‘06 ‘07 ‘08 ‘10 ‘11
S&P Rated Volume $ 98 $ 90 $22 $10 $20 $27
Rated Volume $122 $113 $33 $15 $38 $49
# of Rated Issues 209 165 106 42 92 93
Source: Harrison Scott Publications, Standard & Poor's
European Collateralized Debt Obligations (CDOs) (a,e) Asian Corporates (b)

$160 $300
120 225 87%

81% 83%
75% 86% 82%
80 150 79%
83%
69% 65% 90% 73%
40 75
‘09 ‘10 ‘11 ‘10
‘06 ‘07 ‘08 ‘06 ‘07 ‘08 ‘09 ‘11
S&P Rated Volume $ 94 $110 $25 $1 $6 $3 S&P Rated Volume $177 $147 $162 $237 $196 $182
# of Rated Issues 808 596 106 9 35 17 # of Rated Issues 839 1,008 880 841 797 694
Source: Harrison Scott Publications, Standard & Poor's Source: Thomson Reuters, Standard & Poor’s
European Covered Bonds (CB) (a,e) Asian Structured Finance (a,c,d)

$700 $200
525 150
83%
350 90% 100 80% 60% 72% 78%
72% 71% 41%
88% 69%
175 68% 50
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
S&P Rated Volume $87 $348 $270 $172 $284 $254 S&P Rated Volume $139 $105 $45 $43 $49 $63
# of Rated Issues 65 484 423 328 602 1,191 # of Rated Issues 461 497 342 226 205 238
Source: Harrison Scott Publications, Standard & Poor’s Source: Harrison Scott Publications, Standard & Poor's
Notes for debt issuance:

(a) Excludes confidential and repo transactions
(b) Includes industrial and financial services issuers. Also includes Rule 144a (private
placements), MTN takedowns, convertibles, and preferred stocks. Excludes sovereign
issuers, private placements (except Rule 144a issues), retail notes, commercial paper,
and all agency issues
(c) Excludes asset-backed commercial paper and letters of credit
(d) Includes home equity loans
(e) European data includes Middle East and Africa regions

Ratings Diversification
Standard & Poor’s Ratings Services continues to diversify Ratings

its business geographically and beyond new bond ratings. Financial Strength, Counterparty, and Corporate Credit Ratings: An
opinion of an entity’s overall creditworthiness and capacity to pay its
Product expansion has reduced Standard & Poor’s financial obligations. These ratings do not apply to specific financial
obligations.
reliance on bond issuance or interest-rate sensitive
Bank Loan Ratings: An evaluation of a syndicated loan based on the
businesses. Geographic expansion has increased likelihood of ultimate repayment of the loan and on the recovery value
revenue from outside the United States (local and in the event of default.
Recovery Assessments: A stand-alone, transparent opinion of the likely
cross-border debt markets). recovery of a loan in the event of default; expressed on a numerical
scale—not linked to or limited by the issuer’s traditional corporate
credit rating. Recovery assessments cover secured and unsecured debt.
Financial Strength Ratings(1) Counterparty Ratings(2) Corporate Credit Ratings(3)

Total Outstanding Ratings Number of Ratings Outstanding at Year-End Total Outstanding Ratings
2,500 320 320
1,875 240 240
1,250 160 160
625 80 80
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Ratings 1,924 1,972 2,080 2,093 2,087 2,107 Ratings 283 284 289 295 297 299 Ratings 228 239 242 231 239 246
(1) Formerly Claims-Paying Ability Ratings (2) Total for those organizations whose only rating is a (3) Total for those organizations whose only rating is a
Counterparty Rating Corporate Credit Rating
Global Bank Loan Ratings Recovery Assessments Standard & Poor’s Recovery Recovery
Number of Ratings Outstanding at Year-End Distribution of All Recovery Assessments As of May 23, 2012 Assessments and Descriptions Expectations*
3,000 1,800 1+ Highest expectation
of full recovery 100%**
2,250 1,350 1 Very high recovery 90-100%
2 Substantial recovery 70-90%
1,500 900 3 Meaningful recovery 50-70%
4 Average recovery 30-50%
750 450 5 Modest recovery 10-30%
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 6 Negligible recovery 0-10%
U.S. 1,481 1,357 2,105 2,101 1,845 2,017 % 0.05 15.92 16.59 27.76 17.93 8.78 12.97 * Recovery of principal plus accrued, but unpaid, interest
Europe 291 274 385 456 393 442 Rating 1+ 1 2 3 4 5 6 at the time of default
Rest
** Very high confidence of full recovery resulting from sig-
182 218 297 416 326 298
Unsecured/Subordinated Recovery Assessments nificant overcollateralization or strong structural features
Total 1,954 1,849 2,787 2,973 2,564 2,757 Secured Recovery Assessments Source: Standard & Poor’s
Evaluations Sovereign Ratings

Rating Evaluation Service: A confidential, Servicer Evaluations: An independent, Standard & Poor’s is a global leader in providing ratings and credit-
indicative assessment of how potential objective view of a company’s operational related services for sovereign, sovereign-supported entities, and
acquisitions, debt issues, stock repurchases, capability to service loan and asset portfo- supranational issuers. Public sector coverage extends to local and
recapitalizations, consolidations, and other lios. The Servicer Evaluation rankings serve regional governments, as well as to the healthcare, higher education,
actions may impact a company’s creditwor- as consistent, objective benchmarks for and housing sectors around the world. Standard & Poor’s network of
thiness and credit rating. assessing operational risk that provide valu- offices around the globe enables its regionally-based analysts to gain
able transparency and enable global market valuable local insights into the governments and issuers they rate.
participants to make informed decisions.
Rating Evaluation Service Servicer Evaluations Sovereign Ratings

Evaluations Evaluations Ratings
400 500 160
300 375 120
200 250 80
100 125 40
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Eval. 220 270 210 220 289 296 Eval. 379 420 438 386 378 382 Ratings 114 117 123 124 124 127
Source: Standard & Poor's Source: Standard & Poor's Source: Standard & Poor's
12 McGraw-Hill
S&P Capital IQ
A Scalable Business with Unique, Integrated Offerings for

Global Financial Markets
By integrating and evolving previously separate but strong and successful
business lines into one scaled operation, S&P Capital IQ can offer global
financial professionals high-value content across all asset classes. That
means looking at the business in a new way: not as a collection of single
products, but as a portfolio of capabilities—combinations that offer new and
innovative solutions to the marketplace and produce organic growth.
New Horizontal Capabilities
Data Analysis and Portfolio Analytics Across All Asset Classes
Benchmarks
Enterprise Desktop Research & S&P Dow Jones
Solutions Solutions Analytics Indices for:
Vertical Capabilities
Combine to Form New Global Data S&P Capital IQ Leveraged Equity
Solutions Platform Commentary &
Horizontal Capabilities Data (LCD)
S&P Credit Ratings Fixed Income
and Research Global Credit Portal® Global Markets
Intelligence Commodities
Global Industry
Classification Portfolio Risk Multi-Asset Class
Standards (GICS®) Analytics Research and Economic
Coverage, including:
Compustat - Stocks Thematic
MarketScope®
Advisor - Mutual Funds
S&P Securities - Exchange-Traded
Evaluation (SPSE) Funds
Strategy
Money Market - Bonds
CUSIP Global Directories Custom
Services - Options
Creating One integrated data

Competitive and technology
Advantage infrastructure will Enterprise Data and Desktop Platform and Toolkits
support all the
through
business lines of
Technological
S&P Capital IQ
Innovation Technology and Data Infrastructure
S&P Capital IQ is developing smarter tools for Customers

investors so they can make better financial decisions.
By better leveraging its portfolio of data, benchmarks, Investment Banking
research, and analytics, S&P Capital IQ is creating Private Equity
new integrated products and solutions to address Investment Management
customers’ changing needs.
Wealth Management
Corporates
Commercial Lenders
Brokers/Dealers
Exchanges

S&P CAPITAL IQ
Integrating New Capabilities into

S&P Capital IQ’s Platform
S&P Capital IQ’s targeted acquisitions add specific capabilities
that enhance the overall platform offering. New functionality
and capabilities will bolster S&P Capital IQ’s position as
a leading provider of intelligence to financial professionals.
Over-the-Counter Real-Time Exchange Portfolio and Risk

Market Data Content and Tools Analytics
Credit Market Analysis QuantHouse R² Financial Technologies
Limited
S&P Capital IQ acquired QuantHouse, R² Financial Technologies is a leading
S&P Capital IQ acquired London-based an independent global provider of provider of advanced risk and
Credit Market Analysis Ltd., a leading market data and end-to-end system- scenario-based analytics to traders,
source of independent, accurate atic trading solutions, in 2012. portfolio and risk managers for
market data in the over-the-counter pricing, hedging and capital manage-
(OTC) markets, from CME Group in The acquisition of QuantHouse will ment across asset classes. R² Financial
2012 as part of the S&P Dow Jones provide S&P Capital IQ’s clients with was acquired by S&P Capital IQ in 2012.
Indices joint venture. access to exchange pricing globally,
including securities valuations and R² Financial provides practical risk
Credit Market Analysis combines portfolio analytics, throughout all of intelligence through expertise in
breadth and depth of pricing data with S&P Capital IQ’s desktop and enter- multi-asset class portfolio-level
market-leading technology to deliver prise solutions. analytics, complex credit and
clear, valuable information to leading structured product risk analytics, and
financial institutions around the world. QuantHouse offers ultra-low-latency sophisticated scenario analytics.
The acquisition significantly expands market data technologies, algo-trading
NxR²: Provides real-time pricing, portfolio
S&P Capital IQ’s asset-class coverage for development frameworks, proximity
construction, and risk management software
data and pricing and adds the technol- hosting and order routing services for
to help hedge funds, asset managers,
ogy to move into intra-day quotes on hedge funds, market makers, propri-
structurers, and banks construct, price, and
derivatives and other OTC securities. etary desks, and latency-sensitive
profile risk portfolios. Analysis can be
sell-side firms.
performed across a wide range of instrument
QuantFeed: An integrated low-latency data types including cash, fixed income, equities,
Credit Market Analysis feed, including market, fixed income, equity, derivatives, credit indices, structured
Limited adds the technology derivatives, and fundamental data finance, cash CDOs, and synthetic collateral-
ized debt obligations
for S&P Capital IQ to move QuantFactory: Alpha-generation software
that allows quant traders to spend
into intra-day quotes more time on their core focus—developing
alpha generating models—rather than
on derivatives and other developing tools
OTC securities QuantLink: Low-latency transaction
infrastructure that allows buy- and sell-side
firms to keep up with low-latency market
demands
QuantHouse acquisition
allows S&P Capital IQ to
offer unique real-time R² Financial Technologies
monitors, derived data acquisition provides
sets, and analytics advanced risk and scenario-
based analytics
14 McGraw-Hill
S&P CAPITAL IQ
Enterprise Solutions
S&P Capital IQ has integrated its content for delivery to the financial markets
via feeds, as well as through on-demand and customizable delivery tools
such as the Application Programming Interface (API) for enterprise or individual
users, and the Software Development Kit (SDK) for integration directly into
clients’ proprietary applications. The union of this content merges global
proprietary and third-party data assets from Global Data Solutions, CUSIP
Global Services, Compustat, S&P Capital IQ, Equity Research, and S&P
Securities Evaluations’ Valuations & Pricing.
Providing Solutions—From Pre-Trade Ideas to Post-Trade Activities
Integrated Global Proprietary and Third-Party Feeds and For Seamless Delivery to the Client/End User
Data Assets Customizable Tools
Credit Ratings Ownership Linkages and Excel Plug-in/SDK Front Office | Asset Managers, Portfolio Managers, Money Managers
Financial Obligations
Reference Data & Cross- Enterprise Feed
Reference Services Credit Risk Indicators
Custom Feed Mid Office | Risk Managers, Quants, Compliance
Terms & Conditions Corporate Actions
Valuations and Pricing Company Information
Back Office | Custodians, Chief Technology Officers, Clearing
Equity and Credit Research
Enterprise Solutions Content Modules

Financial profession- Credit Ratings One of the largest global credit ratings databases available
als around the world to support risk-driven analysis across instruments, entities,
and sectors. History dating back to 1922 enables extensive
turn to S&P Capital IQ benchmarking and risk modeling.
for the coverage, Reference Data & Linking capability for global securities, issuers, and entities
Cross-Reference to create a clear picture of concentration, market exposure,
quality and experience Services and risk.
they need to support Terms & Real-time data for timely securities processing, reporting,
their daily workflows Conditions and analysis. Global coverage of more than 1.4 million
structured finance securities and more than 3 million global
corporates, governments, agencies, and U.S. municipals.
Valuations and Independent and transparent valuations across asset classes
Pricing for global fixed income securities. Market- and model-based
pricing that deliver a robust view of an illiquid bond’s value
by incorporating credit risk and market risk.
Ownership Comprehensive database that ties together the underlying
Linkages and data revealing connections among sectors, instruments,
Financial issuers, entities, parents, and obligors to better understand
Obligations risk exposure and potential conflicts of interests.
Credit Risk A range of quantitative tools that provide a timely source of
Indicators information to assess creditworthiness and relative value.
Analytics content includes S&P Market-Derived Signals,
Probability of Defaults, and Risk-to-Price.
Corporate Actions Critical information for the effective administration of global
securities portfolios. Actively tracks dividends, distributions,
corporate actions and changes affecting securities, mutual
funds, and accrual funds worldwide.
Company One of the deepest fundamental, market, estimates,
Information ownership, and professionals data sets for detailed company
and security analysis, enabling financial professionals to
conduct rigorous top-down company research, develop
complex investment back-testing models, and assess risk.
Equity and Credit A comprehensive source of differentiated multi-asset class
Research global research, analysis, strategies, and services for
institutional investors and all levels of wealth management
institutions as well as financial advisors.

S&P CAPITAL IQ
Desktop Solutions
S&P Capital IQ brings together integrated data sets, indices, research, and
analytic insights in an integrated desktop solution to serve multiple investor
segments across the financial community.
Client End-Users Investment Private Investment Wealth Commercial

Bankers Equity Managers Managers Corporations Lenders
Desktop Solutions
Financial S&P Capital IQ

Q Platform
Data & Analytics
Deep Credit
Insights and Globall Credit Portal and S&P Capital IQ Credit Analytics
y
Risk Solutions
MarketScope Advisor
Wealth Management
Solutions S&P Capital IQ for
Wealth Management
Institutional Investor Money Market Directories

M e
Intelligence
S&P Capital IQ Platform S&P Capital IQ was

awarded “M&A Product/
The S&P Capital IQ Platform integrates information on both public and Service Provider of
private capital markets along with powerful applications for desktop the Year” in 2011 by
research, screening, financial modeling, real-time market data, backtesting, The M&A Advisor
portfolio management, and quantitative analysis.
Financials and Valuation: Transaction Data: Global Sell-Side Research & Fixed Income: Fixed income
Financial coverage of 92,000 coverage of M&A, equity and Estimates: Corporate information and debt capital
companies globally with more fixed income offerings, private earnings estimates for 18,000 structure data
than 5,000 unique financial placements, buybacks, and active companies and historical
Alpha & Risk Models: Stock
data items and 2,500 bankruptcies coverage for 40,000 active/
selection models and equity
industry-specific items inactive firms, Intelligent
Global Market Data: risk models
Estimates (quantitatively
Qualitative Data: Company Macroeconomic data and
forecasted corporate earnings), News, Transcripts, Events,
and people intelligence, key Global Industry Classification
broker and sell-side research, and Mobile Applications
developments, private equity Standard (GICS®), an
and aftermarket research Ownership and Investor
data, executive compensa- enhanced industry classifica-
tion, and corporate actions tion system jointly developed Activism
by Standard & Poor’s and
MSCI Barra in 1999
www. capitaliq.com
Global Credit Portal®

Global Credit Portal brings together fundamental data, market-driven measures,
and unique research to support efficient credit and market risk-driven analysis and
alpha discovery. Offerings on the Global Credit Portal include Standard & Poor’s
Ratings Services’ credit ratings, research, credit-adjusted financials, and default and
recovery analysis as well as S&P Capital IQ’s credit model scores, probability of
defaults, peer rankings, indices, valuations, and market reference data.
RatingsDirect® Credit Health Panel CreditStats Direct® Valuations
on RatingsDirect
Access actionable market Analyze the relative credit Obtain end-of-day pricing
intelligence and risk quality of customers, Assess the credit of opinions on more than 3
analytics based on Standard suppliers, peers, and other S&P-rated companies by million global fixed income
& Poor’s extensive global groups of rated and unrated viewing Standard & Poor’s instruments—from simple
credit ratings and research companies with a compari- analytical credit adjust- to complex—provided by
son of 24 financial metrics ments on 2,800 global S&P Securities Evaluations
per company—plus an industrial and utilities
overall company score companies
16 McGraw-Hill www. globalcreditportal.com

The integration of default and

S&P Capital IQ Credit Analytics recovery tools with scoring
S&P Capital IQ delivers actionable information to support clients’ models produces even more
enterprise risk management, economic and regulatory capital dynamic risk measures
management activities, and risk pricing in one Web-based solution
that includes CreditModel, CreditPro®, and CreditSignals.
CreditModel CreditPro® CreditSignals
Choose Review Adjust Compare Evaluate Map

Entity Inputs Scenarios Credit Scores Default Rates PDs to Changes
Choose one of the Review the Adjust the financials Compare various Evaluate entities’ Map Probabilities of
thousands of rated company’s financials to see how changes scenarios and cumulative Default to changes
and unrated that have been used impact the estimate evaluate the firm’s alternative default
companies available to quantitatively sensitivity to rates by sector and
derive an estimate of different changes Standard & Poor’s
creditworthiness credit ratings
MarketScope® Advisor
MarketScope Advisor provides retail wealth manag-
ers and financial advisors with the market intelligence,
up-to-the-minute news and commentary, tools, and
broad multi-asset class coverage they need to service
their clients. Soon, MarketScope Advisor Premier will
offer value-added research from the S&P Capital IQ
platform as well as the capability to load firm-wide
internal research to the platform for integrated
viewing within the MarketScope Advisor Platform.
www. advisorinsight.com
S&P Capital IQ for

Wealth Management
S&P Capital IQ for Wealth Management provides
private wealth managers with the most comprehen-
sive investment research, leading-edge market
monitoring tools, and institutional-level content to
help them grow and nurture their business.
Money Market Directories 86,000 pension plans, endowments,

and foundations
Money Market Directories is a leading global resource
for institutional investor intelligence, and provides 27,000 investment management and
advisory firms
up-to-date information on 375,000 key decision
makers from more than 100 countries. 4,700 family offices and their service providers
2,000 investment consultant branches
www. mmdwebaccess.com

S&P CAPITAL IQ
Research & Analytics
S&P Capital IQ Equity Research S&P Capital IQ is a comprehensive source of differentiated

had 6 winners in The Wall Street cross-asset, cross-market analytics; market commentary and
Journal’s 2012 “Best on the Street” strategies; company research; and non-discretionary advice
Analysts Survey for financial professionals.
Multi-Asset Class Research and Analysis

S&P Capital IQ’s multi-asset class research and Stocks: More than 1,900 stocks covered Mutual Funds: Provides rankings, commentary,
analysis is provided by analysts who bring the qualitatively and 8,200 stocks covered and analysis on more than 19,000 mutual funds
highest standards of integrity, objectivity, and rigor quantitatively across the world
Bonds: Portal includes research, tools, and a
to their work. The research and analysis includes Exchange-Traded Funds (ETFs): ETF bond ladder builder covering more than
qualitative and quantitative models that cover: holdings-based analysis reports on more than 200,000 issues from more than 40,000 issuers
600 ETFs with an overweight, market weight,
Options: Based on stock coverage of 1,200
or underweight recommendation
U.S. stocks and ADRs, S&P Capital IQ offers
covered calls and calendar spreads
Non-Discretionary Advisory Services

Global Markets Intelligence (GMI) is S&P Capital IQ’s GMI’s Competitive Advantage Equity Strategy Global Markets
advisory business.* It provides risk-based non-dis- ranks in the top 2% for three-year returns in
cretionary equity and fixed income portfolio strate- the Lipper Large Cap Core Equity universe as
Intelligence
gies, asset allocation, and fund review services to of June 30, 2012 currently advises
asset managers. Global Markets Intelligence is GMI’s Balanced Credit Model Portfolio utilizes on more than
supported by S&P Capital IQ’s broad, proprietary a proprietary strategy that measures how
offering of data, analytics and research. corporate bonds compensate holders for $18 billion in
market and credit risks
total assets
GMI builds methodologies with risk mitigation GMI’s multi-manager strategies use asset
components at their core, not as a separate overlay, allocation and fund recommendations, which
to generate superior risk-adjusted returns. can be customized to a client’s available funds
and designated asset classes
Improving Investor-Level Transparency with Market Reports

S&P Capital IQ’s Global Market Consensus Earnings Report
Intelligence creates cross-asset class
Report provides detailed and consensus global
perspectives and innovative ways to
estimates data, with over 40 data measures,
leverage credit and risk intelligence
including EPS, Revenue, Net Income, EBITDA,
through market reports.
and EBT
Lookout Report
A bi-weekly compendium from S&P Capital IQ
and S&P Dow Jones Indices that provides
current data and forward-looking perspectives
and insights on contemporary issues
Commentary
Leveraged Commentary & Data (LCD) is the preemi- LCD’s coverage of the leveraged
nent provider of leveraged finance news and analysis. finance market includes:
LCD’s team of experienced analysts and reporters Real-time news
uses its proprietary database along with conversations
Daily and weekly commentary that puts news
with buy-side and sell-side professionals to present
into perspective
unique market perspectives on current events.
Leveraged loan returns for the U.S. and Europe
LCD’s proprietary database Current market technicals and analytics
is the only industry-wide
repository of leveraged loan
memoranda www. lcdcomps.com
LCD has 9,000 LinkedIn group members;
2,300 Twitter followers; 2,500 Facebook
* S&P Capital IQ Global Markets Intelligence is a completely non-discretionary advisory business. GMI does not admin-
“Likes”; and 24,000 YouTube views
istrate or custody customer securities, invest, nor engage in securities transactions in any form. GMI is analytically
and editorially independent from any other analytical group at Standard & Poor’s
18 McGraw-Hill
S&P Dow Jones Indices
More than $6 trillion* The S&P Dow Jones Indices joint venture was formed in
was directly benchmarked June 2012 and combines S&P Indices and Dow Jones Indexes
to S&P Dow Jones Indices’ to create one of the world’s largest providers of financial
family of indices market indices.
• McGraw-Hill contributed its S&P Indices business, a leading
provider of equity, commodity, real-estate, and strategy indices
Ownership of S&P Dow Jones • CME Group/Dow Jones joint venture contributed its Dow Jones
Indices Joint Venture Indexes business, recognized for its strength in equity, commod-
ity, emerging market, target date, and dividend indices
McGraw-Hill 73.0% With a long track record of providing investors with innovative, index-based
(1)
solutions, original research and timely data, S&P Dow Jones Indices is
CME Group 24.4%
now home to the Dow Jones Industrial AverageSM and S&P 500®, as well
Dow Jones & as the S&P/Case-Shiller® Home Price Indices, S&P GSCI® and the Dow
Company, Inc.(2) 2.6% Jones-UBS Commodity IndexSM.
(1) Ownership through its affiliates

New Licensing Agreement
(2) Indirect ownership
The joint venture’s new license agreement changes S&P Indices’ financial
relationship with the CME—from a transactional, fee-per-trade model to
a profit-sharing model tied to the financial performance of the CME’s
S&P Dow Jones overall trading and clearing business for equity-based futures, swaps, and
Indices*
options on futures based on S&P Dow Jones Indices. The CME Group will
Calculates more than have a long term, ownership-linked, exclusive license to list futures and
830,000 indices options on futures based on certain S&P Dow Jones Indices.
Publishes benchmarks Enhanced Platform for Growth and Innovation

that provide the basis for The combination broadens a successful partnership between McGraw-
542 ETFs globally Hill and the CME Group that began 30 years ago with the joint creation
of the S&P 500 Futures contract. Subsequently, numerous innovative
products were launched, including the S&P 500 E-mini—the most-traded
equity index futures contract in the world.
S&P Dow Jones Indices will target growth through international and
* Historical figures from S&P Indices and Dow Jones
Indexes are as of December 31, 2011 and have been asset-class expansion, new product development, enhanced market data
combined for illustration purposes only; not intended offerings, and cross-selling opportunities. The joint venture will help
to represent what the figures would have been had the
joint venture already been launched
advance international growth by building on relationships already estab-
lished by the CME Group with some of the largest derivative exchanges
throughout the world. Partners’ exchange relationships and the CME
Globex platform provide global distribution and linkage to fast-growing
www. spdji.com
emerging markets.
Exchange Relationships Around the World

Moscow Exchange MICEX-RTS
CBOE
Chicago Board of Options Exchange TMX Group KRX TSE
Korean Exchange Tokyo Stock Exchange
BMV DME NSE
Bolsa Mexicana de Valores Dubai Mercantile Exchange National Stock Exchange of India OSE
Osaka Securities Exchange
HKE
Hong Kong Exchanges and Clearing Ltd
Bursa Malaysia
SGX
Singapore Exchange
MILA BM&F BOVESPA JSE
Mercado Integrado Latinoamericano Johannesburg Stock Exchange
ASX
Australian Securities Exchange
S&P Dow Jones Indices CME Group

S&P DOW JONES INDICES
Benchmarks
The S&P 500® is the S&P Dow Jones Indices, the world’s leading index provider, maintains a wide
world’s most followed variety of investable and benchmark indices to meet an array of investor needs.
stock market index with Its family of indices includes the S&P 500; the Dow Jones Industrial Average;
$1.45 trillion* directly the S&P/Case-Shiller(1) Home Price Indices, the leading measure of U.S. home
indexed to it prices; the S&P Global BMI, an index tracking approximately 11,000 constituent
companies; the S&P GSCI® and the DJ-UBS Commodity Index, two of the
industry’s leading commodities measures; and the S&P National AMT-Free
Municipal Bond Index, the premier investable index for U.S. municipal bonds.
S&P Dow Jones Indices span asset classes, investment strategies, and geographic markets
Equity Fixed Income Commodities Economic Thematic Strategy Custom
Families of indices Broad market bench- The S&P GSCI and Leading monthly Indices providing Indexing strategies Indices custom-
for global and local marks measuring the DJ-UBS Com- measures that track liquid exposure to across asset classes designed by deriva-
markets, covering exposure to liquid modity Index are changes in the value investment themes and investment tive and structured
approximately 11,000 fixed income asset widely recognized as of U.S. residential that cut across themes. product providers,
securities in more classes as well as leading commodity real estate, default traditional industry ETF providers,
than 80 countries less observable seg- market measures. rates in consumer definitions. Alternatives exchanges, asset
with over 20 years of ments of the credit credit, and the princi- Dividends managers and
uninterrupted history. market. Dow Jones-UBS pal cost components Green Investing pension plans and
Commodity Index Currency
of the U.S. healthcare Infrastructure calculated by S&P
Global/Regional U.S. Municipals S&P GSCI industry. Fund-Based Dow Jones Indices.
Natural Resources
Sectors Credit Default Swaps S&P World Commod- Risk Control Clients include:
S&P/Case-Shiller Energy
Capitalization Leveraged Loans ity Index (WCI) Home Price BNP Paribas
Inverse and Leverage
S&P Strategic Futures Commodity Producers
Growth & Value Money Markets S&P/Experian Con- Credit Suisse
Asset Allocation
sumer Credit Default Luxury
U.S. Treasuries First Trust
Quantitative Strategies
S&P Healthcare
Global Fixed Income Goldman Sachs
Economic Indices Target Date
China and Australia Lyxor
Bond Markets SGI
Sukuk
* As of December 31, 2011

(1) Case-Shiller® and Case-Shiller Indexes® are registered trademarks of Fiserv, Inc.
Launching Innovative Indices How S&P Dow Jones

Indices Generate
S&P GIVI™ (S&P Global Intrinsic Value Index) Award-Winning Indices Revenue
S&P GIVI provides investors with an alternatively weighted, S&P Dow Jones Indices has been Investment vehicles such as ETFs,
low-volatility exposure to global equity markets. Alterna- recognized with multiple industry which are based on S&P Dow
tives to traditional market cap weighting are becoming awards in 2011 and 2012, including: Jones Indices and generate
increasingly important as investors look beyond classic revenue through fees based on
market beta for factors that influence performance and risk. “Most Innovative Index Provider of the
assets in underlying funds
S&P GIVI combines exposure to two such factors—low Year”—Structured Products Magazine Asia
volatility and intrinsic value—into one unique index. and Americas Index-related licensing fees, which
are either annual fees based on
®
The S&P 500 Low Volatility Index “Best Index Provider in Asia”—Asia Asset
assets under management or flat
Management
The S&P 500 Low Volatility Index measures the perfor- fees for over-the-counter (OTC)
mance of the 100 least volatile stocks in the S&P 500. The “Most Innovative ETF Index Provider in derivatives and retail-structured
index is designed to serve as a benchmark for low volatility the Americas” and “Most Recognized ETF products
or low-variance strategies in the U.S. stock market. Brand in the Americas (for SPDR)”—
Data subscriptions, which support
Constituents are weighted relative to the inverse of their ExchangeTradedFunds.com
index fund management, portfolio
corresponding volatility, with the least volatile stocks “Acquisition of the Year”—Inside Market Data analytics, and research
receiving the highest weights.
Listed derivatives, which
The S&P/ASX Australian Fixed generate royalties based on
Interest Series trading volumes of derivatives
contracts listed on the Chicago
The S&P/ASX Australian Fixed Interest Index Series is a Mercantile Exchange, Chicago
broad benchmark family designed to measure the perfor- Board Options Exchange,
mance of the Australian bond market meeting specific Australian Securities Exchange,
investment criteria. The series is designed for use by Montreal Exchange, and National
institutional investment managers, managed and superan- Stock Exchange of India
nuation funds, and professional advisors.
20 McGraw-Hill
Record-Level ETFs Linked to ETFs Based on S&P Dow Jones Indices (as of July 31, 2012)
S&P Dow Jones Indices
Assets Under Management: $421 billion Number of ETFs 12/31/11 07/31/12
Exchange-traded funds (ETFs)—which (in billions)
S&P Indices 378 432
represent share ownership of an index fund Dow Jones Indexes 164 174
but trade like shares of stocks—have become S&P Indices $359 Total 542 606
some of the most actively traded securities
on stock markets around the world. Dow Jones
Indexes $62
S&P Indices was at the forefront of ETF development
when the very first ETF—the S&P 500 SPDR
(Standard & Poor’s Depositary Receipts)—launched
in 1993. Today, S&P Dow Jones Indices serves
as the basis for ETFs, futures, options, and other
investable products around the world.
S&P Index-Based Global ETF Assets SPDR Trust Value/Average Daily Trading Volume
(dollars in billions) (dollars in billions) (shares in thousands)
$320 $120 400,000
240 90 300,000
160 60 200,000
80 30 100,000
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Dollars $38.2 $49.0 $63.2 $79.8 $113.7 $135.1 $161.2 $235.3 $203.6 $247.0 $300.3 $313.7 Dollars $25.5 $30.4 $39.3 $43.1 $54.8 $59.5 $64.1 $100.1 $93.9 $84.9 $89.9 $95.4
Source: Standard & Poor's (2000-2005); Bloomberg (2006-2011) Shares 7,671 13,803 33,881 41,121 42,965 61,673 70,105 156,073 301,627 247,061 210,232 218,228
Source: American Stock Exchange (2000-2008); Bloomberg (2009-2011)
SPDR Dow Jones Industrial Average ETF Trust Value/Average Select Sector SPDR Trust Value/Average Daily Trading Volume*
Daily Trading Volume (dollars in billions) (shares in thousands) (dollars in billions) (shares in thousands)
$16 24,000 $48 280,000
12 18,000 36 210,000
8 12,000 24 140,000
4 6,000 12 ‘00 ‘01 ‘02 70,000

‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Dollars $1.9 $3.0 $4.7 $6.8 $8.0 $7.6 $6.7 $8.6 $9.0 $9.0 $8.7 $10.8 Dollars $2.4 $3.6 $3.3 $6.2 $9.4 $12.8 $17.7 $26.5 $23.1 $31.4 $40.1 $44.0
Shares 1,394 3,529 7,893 7,210 6,683 6,702 7,228 13,518 23,985 17,157 9,652 8,747 Shares 2,185 2,690 5,200 5,201 9,800 30,460 45,208 91,163 260,952 233,390 183,918 195,806
Source: Bloomberg Source: American Stock Exchange (2000-2008); Bloomberg (2009-2011)
* Select Sector SPDRs started trading December 22, 1998
S&P 500 Futures and "E-mini 500"* Contracts Traded on the CME S&P 500 Option Contracts Traded on the CBOE
(contracts in millions) (contracts in millions)
700 ‘08 ‘11 200

‘09 ‘10
525 150
‘07
350 ‘06 100

‘05
‘03 ‘04
175 ‘02 50
‘00 ‘01 ‘01 ‘06 ‘09 ‘10 ‘11
‘00 ‘02 ‘03 ‘04 ‘05 ‘07 ‘08
Futures 22.5 22.5 23.7 20.2 16.1 15.4 14.8 15.8 16.8 10.4 7.7 7.3 Options 22.0 22.8 29.9 36.7 49.5 71.8 104.3 158.1 178.6 154.9 175.3 197.1
E-mini 19.2 39.4 115.7 161.2 167.2 207.1 257.9 415.3 633.9 556.3 555.3 621.5 Source: Chicago Board Options Exchange
Source: Chicago Mercantile Exchange
* E-mini 500 contracts started trading on September 9, 1997
COMMODITIES
Platts
Meeting the Information Needs of the Global Energy,
Petrochemicals, and Metals Markets
Platts is a leading global provider of energy, petrochemicals, Platts is a leading source of price
and metals information. Its products and services enable assessments in the physical and
financial commodities markets
thousands of traders, risk managers, analysts, and industry
leaders in more than 150 countries to make informed and
up-to-the-minute trading and investment decisions. An inde-
pendent provider, Platts has been a respected source for Platts’ Industry 2011 Revenue
actionable information and global benchmarks for more than Coverage $419 million
a century. Oil
Petrochemicals
More than 12,000 price assessments, references, and indexes Natural Gas
Platts is
are produced daily and disseminated to subscribers through Platts’ Electricity McGraw-Hill’s
newsletters, real-time alerts, and market data services. With its Coal most global
finger on the pulse of the many commodity markets central to Nuclear business with
Freight almost two-thirds
economic development, Platts is positioned to benefit from height- of its revenue
ened demand for its services in promising and challenging economies Base Metals coming from
and markets throughout the world. Steel outside the U.S.
Bio Fuels
Agriculture
Embedded in the Industry’s Workflows For many commodities, Platts’

price assessments are considered
The strength of Platts’ market information has resulted in customers “benchmarks” for establishing prices
embedding its information directly into their end-to-end workflows. in contracts and monitoring risk
This enables customers to identify opportunities to profit from market
movements and better manage their risk.
Develop Trading Find Trading Execute Settle

COMMODITIES AND TRADING WORKFLOW Strategy Partners Trades Trades
PLATTS’ PRICE ASSESSMENTS are used as benchmarks in the commodities and trading workflow
Manage Trading Manage Price, Develop Risk Analyze Finance

RISK MANAGEMENT WORKFLOW Compliance Asset, and Credit Risk Hedging Strategies Markets
PLATTS’ FORWARD CURVES support the risk management workflow
Platts’ Methodology: How Markets Use Platts’

Assessing the Market Value of Commodities Price Assessments
Platts’ price assessments are the
Platts’ Market-on-Close (MOC) price assessment process is used basis for billions of dollars of
globally for Platts’ petroleum-related assessments. The MOC price transactions annually in the physical
assessment process identifies bids, offers, and transactions by company and futures markets:
of origin, making it the most transparent view of price discovery
available in the markets. The MOC methodology yields an end-of-day Buyers, sellers, and traders use them as a
trading value which facilitates cross-commodity comparisons and basis for pricing spot transactions and term
contracts
mark-to-market accounting.
Risk managers use them to settle contracts
Platts eWindow is an online communication tool that enables MOC and to place a market value on the product(s)
participants to instantly communicate bids, offers, and other deal they hold
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pants simultaneously, and to view market activity ‘live’ as it happens. patterns in supply and demand
Governments reference them to formulate
royalty payments and retail prices
Exchanges and investors use them to price
over-the-counter derivatives contracts
22 McGraw-Hill
Platts Innovates to Help Emerging and

Established Markets Evolve
As the world’s diverse energy markets took shape over the last 100 Exchange Partners
years, Platts’ innovations in price discovery and information delivery
Platts’ data have been licensed
have provided solutions to pricing challenges and helped build Platts’
to exchanges and other entities
reputation as a leading provider of energy price information. Today,
for trading and clearing purposes,
many of Platts’ price assessments are considered global benchmarks.
including:
As the energy markets continue to evolve, Platts is leading the way Intercontinental Exchange
by helping clients understand and respond strategically:
CME Group
New Price Assessments for New Markets Ensuring Liquidity in Oil Markets Singapore Exchange
Platts is developing new price Platts has introduced innovative Tokyo Commodity Exchange
assessments to keep pace with methodology enhancements to Moscow Exchange MICEX-RTS
changes in the North American address pricing challenges related
NASDAQ OMX
market: to market liquidity:
Platts’ Brent price assessment is used as
Extensive exploration and production activity
a benchmark to price more than 60% of
in new various crude oil shale “plays” such
the world’s total crude oil. By refining the
as Eagle Ford and Bakken promise to boost
methodology for its Brent price assessment,
domestic crude output
Platts resolved issues related to the sulfur
content and underlying liquidity of this
Substantial pipeline development projects
benchmark. This North Sea crude is fast
are opening new markets for previously Products Distribution Delivery
becoming a standard for regional pricing
landlocked American and Canadian crudes & Services Partners Platforms
in Asia-Pacific
including a Western Canadian crude blend
that is delivered from the Cushing, Oklahoma Market Data Thomson Reuters Platts Market
Platts’ Dubai price assessment is a leading
hub to the Gulf Coast benchmark for Middle Eastern crude sold Real-Time Alerts Bloomberg Center
into Asia. Platts enhanced the liquidity Newsletters Global View Platts on the Net
With the shale gas boom promising to create Platts XML Direct
new markets for natural gas liquids (NGL), underlying the Dubai price assessment by Analytics Reports Intercontinental
Platts is monitoring developments around the incorporating the delivery of additional Maps & Exchange
crude streams Geospatial SunGard
gas value chain for potential new spot price
assessments in the NGL/LPG (liquefied Conferences Morningstar
petroleum gas) market and others
CME Group and Intercontinental Exchange

list more than 600 Platts-based oil, gas,
coal, metals, and freight contracts which
have been traded more than 170 million
times in the last 12 months*
* As of June 2012
Platts’ Innovations Benefit the Steel Value Chain

As industries have moved from long-term pricing contracts to short- Today, with the integration of Steel
term spot market pricing, the strategic $2 trillion steel market has Business Briefing’s price assessments
benefitted from Platts’ innovations. Platts addressed the metals market’s and The Steel Index’s price references,
need for pricing mechanisms by establishing price points for iron ore, Platts publishes more than 850 price
metallurgical coal, ferrous scrap, freight rates, and other commodities points for steel and related raw
that span the steel value chain.
materials which serve the information
Introducing Daily Steel Coverage Steel-Related Price References needs of miners, steel producers, and
In 2007, Platts extended its metals coverage From 2008 through 2010, Platts introduced end-users worldwide
into steel with the launch of Steel Markets more than 100 new price references for steel,
Daily, a newsletter which included prices for iron ore, scrap metal, manganese, coking coal,
hot-rolled coil and rebar and other raw material used in making steel
Open Market Values for Iron Ore Advancing Platts’ Position in Metals
In 2008, Platts introduced IODEX, the world’s In 2011, Platts acquired the Steel Business
first daily price assessment for seaborne iron Briefing Group and its two divisions: Steel
ore reflecting open market values Business Briefing, a leading provider of steel
news and prices, and The Steel Index, a www. platts.com
specialist price information service
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J.D. Power and Associates
Recognizing Excellence. Companies in more than 50 countries turn to J.D. Power’s

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Each year, more than 20 million survey-related communications capture
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J.D. Power is McGraw-Hill’s customers. J.D. Power’s capabilities allow companies to hear the voice
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24 McGraw-Hill
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Providing Essential Business Information Solutions Aviation Week’s

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26 McGraw-Hill
Notes

McGraw-Hill Education
As a global leader in educational content and technology,
McGraw-Hill Education is providing customized and
adaptive digital learning solutions—for early childhood to
professionals—and has the opportunity to make education
more affordable, more accessible, and more adaptive than
ever before.
The digital integration of content, technology, and distribution
is creating significant new growth opportunities around the
globe for McGraw-Hill Education’s products and services.
How the New Operating Model Is Creating New Opportunities

and Driving Long-Term Growth
Legacy Drivers New

Model Operating
Enablers Model
At McGraw-Hill Education, One-way customer Sh i ki

Shrinking Cl d
Cloud-based Interactive
i customer
technology is the key to changing relationships technology costs delivery model relationships
the operating model. Connecting One-time unit sales Ubiquitous, Workflow Subscription-based revenue
content and managing digital seamless integration
Long development connectivity Rapid development cycles
assets globally are an essential cycles Mobile
part of the effort to grow revenue, Digital-savvy applications Customized solutions
One-size-fits-all customers
reduce costs, and improve overall Digital, data enablement
workflow and productivity. Physical inventory “Big Data” services
U.S.-centric Digital asset management
production
Global production and
distribution
Direct-to-consumer sales/
distribution
Lower cost base
McGraw-Hill Education 2011 Revenue

At-a-Glance $2.3 billion
Higher Education, Professional
and International Group
Key higher education markets:
International college, university, and Higher Education, Professional
post-graduate fields/markets, and English as and International Group (HPI)
a Second Language $1.3 billion
Key professional markets:
School Education Group
Worldwide medicine, healthcare, engineer-
$949 million
ing, science, computer technology, business,
government and general reference publishing
Key international markets:
Education, business, and professional markets
School Education Group

Pre-kindergarten, elementary, secondary,
testing, supplemental, vocational, and post- www.mheducation.com
secondary fields in the U.S.
28 McGraw-Hill
McGraw-Hill Education Custom-Tailored

Course Content and
McGraw-Hill Education is well positioned to take advantage of Learning Solutions
new opportunities created by the rapid expansion of digital
products and services. With an extensive portfolio of digital Student Affordability &
learning solutions that integrates digital content, McGraw-Hill Success Accessibility
Education is providing solutions that make workflow functional-
Improve retention Ensure all students
ity and engaging, interactive content accessible anytime, rates and student have affordable
anywhere. The higher education and professional markets are learning outcomes access to learning
materials
shifting to higher-margin, subscription-based digital offerings.
Classroom Online
Optimizing the Core Business for Profitability Excellence Enablement
Drive Operational Excellence Enable faculty Seamlessly integrate
success through and implement
McGraw-Hill Education’s publishing processes are fully instructional digital services and
digital, which means a wealth of respected educational tools and services solutions
content can be repurposed quickly and cost-effectively
across multiple products and markets
In the new digital publishing model, McGraw-Hill Education
Where Education Is Going
is supplying enhanced digital content in a wide variety
of formats—from subscription-based online sites, to Technology is playing an increasing
downloadable titles for e-readers and tablets, to apps for role in teaching and learning, and
support
mobile phones
Education will move very quickly
Reimagining Learning to a personalized learning model
with adaptive learning technology.
Reimagine learning in new ways that will Rich algorithms, supported by deep
improve student learning and success academic research, are going to
play a critical role in getting there
Focus primarily on digital, data-enablement
Teachers and instructors will also
services play a critical role in this shift. It is
Single sign-on for college and university learning important that they are equipped to
manage the classroom as this
management systems makes it possible to achieve evolution in education occurs
deeper integration across applications sets. This
creates a better user experience for instructors and How “Big Data” Will
students which then promotes increased usage of Empower Students and
McGraw-Hill’s products and services Improve Performance
Innovative use of technology, such as Tegrity’s Teachers: With data-driven insights,
educators are provided the informa-
Lecture Capture tion to tailor their instruction based on
Capturing Growth Opportunities the knowledge, skills, and learning
styles of students in each classroom
Leverage expertise as a content and learning
Parents: Increased access to data
company to capture growth opportunities provides parents with a clearer picture
of their child’s academic performance,
Accelerate growth in key markets such as the enabling them to direct their efforts to
Middle East, India, and China through acquisitions help their child or children improve
and strategic partnerships areas of weakness and reinforce areas
of strength
Offer college and career readiness programs and other
Students: When students receive
learning products directly to students and their families immediate, specific feedback on their
so that young people can better prepare for successful performance, they are more likely
futures while still in school or after graduation to be engaged and motivated to drive
their own learning. This type of
Work with business, professional, and government empowerment is critical to improving
student performance
groups to create assessment and learning solutions
closely tailored to particular career requirements
HIGHER EDUCATION, PROFESSIONAL AND INTERNATIONAL GROUP
Digital Workflow Solutions for Teaching and Learning
Enhancing the McGraw-Hill is leveraging its trusted content in higher education

Learning Experience. with innovative technology to provide a powerful new genera-
tion of products and services for today’s college and university
Providing Real Results. students and instructors. These are aggregated to create an
integrated offering that improves teaching and learning.
An Integrated Offering that Improves Teaching and Learning

Attend Course Course Grade
Classes Content Assignment Study Center
(Traditional, Hybrid,
(Traditional Hybrid
Faculty Fully Online) -Textbooks -Reading -Memorizing Online work is
-Lectu
Lecture
e and -E-books
Eb k -Homework
Homeworkk
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Reviewing
ewwing automat
automatically
t ticallly
Student study -A
Articles
Articles -Reports
Reports
p textbook, class graded and entered
graded
class notes
data capture -Multimedia
M lti di notes i grade
into d center
-Tests Student
and analysis content library -Flashcards
-Self-quizzing and
practicing
-Mastering content
Digital sales grew by

more than 40% in 2011
More than 1.2 million

McGraw-Hill Connect™
students and professors
McGraw-Hill Connect is a complete digital solution that has
use McGraw-Hill Connect* evolved from a homework assignment and assessment
* As of June 2012
platform into a fully integrated learning platform that
individualizes each student’s learning process. The online
platform is based on McGraw-Hill’s extensive research of
professors’ instructional processes and students’ study
habits and workflow. The result is a reinvented learning
experience that is rich in information, visually engaging,
and easily accessible to both instructors and students.
Student Study Center: Students can access

course content, e-textbooks, a multimedia
library, and a gradebook
Instructor Resource Center: Instructors http:// connect.mcgraw-hill.com
can assign quizzes and practice exams,
review student/class performance data, and
provide feedback to students online outside
of office hours
Instructors can incorporate McGraw-Hill
LearnSmart into the McGraw-Hill Connect
platform for a more robust course offering
30 McGraw-Hill
LearnSmart’s online
McGraw-Hill LearnSmart™
store opens a new www.mhlearnsmart.com
McGraw-Hill LearnSmart helps students succeed by
direct-to-student channel providing a personalized learning path that’s based on
for McGraw-Hill and for their responses to questions, as well as how confident they
feel about the answers they provide. The program also
students wanting to get encourages retention of the material by identifying
an edge in their courses concepts that students are likely to forget, and directing
them back to portions of an e-book to help them solidify
their understanding of concepts. New for the 2012 fall
semester, students can purchase a subscription directly
from the LearnSmart store rather than relying on profes-
sors and institutions to select LearnSmart as part of
defined course materials. Higher education institutions
that use LearnSmart benefit by increasing student
engagement, retention, and grades.
McGraw-Hill’s Tegrity Tegrity Campus™

Campus had 30 new
Acquired by McGraw-Hill Education in 2010, Tegrity
and expanded partner- Campus 2.0 captures all of an instructor’s class lectures www.tegrity.com
ships with universities throughout a course, from audio recordings of the
professor’s voice to accompanying slides or videos shown
and colleges across on the presentation screen. These complete recordings are
the U.S. by the end of captured for replay and accessible to students throughout
the semester whenever they are studying or reviewing
June 2012 concepts. Using the patented “search anything” technol-
ogy, students can instantly locate and replay the exact
points in any of the class lectures, either on a computer or
mobile device, to improve their understanding of concepts.
Tegrity’s new Bookmarks app lets students and professors

set digital bookmarks at certain points as the lecture is
being recorded:
Students can set digital bookmarks when
points in the lecture are unclear and they
want to relisten to a segment, or if information
seems important for a test
Instructors can set bookmarks to highlight
important points for a test and make them
visible to the entire class
Total industry higher

E-books
education e-book
Top-selling higher education business, economics, science,
revenue grew nearly math, humanities, foreign languages, and social sciences
46% between 2008 and titles are available for purchase through various e-book
stores. McGraw-Hill Education is partnering with makers
2010. Total net revenue of devices and other PC-based e-book software providers
for higher education as well as developing applications for the iPad. The
majority of McGraw-Hill’s higher education textbooks can
e-books in 2010 was be downloaded from CourseSmart, a common industry
almost $250 million* e-textbook and digital course materials platform.
www.CourseSmart.com
*Source: The Book Industry Study Group, Inc. (BISG) and Association of American Publishers (AAP),
“BookStats 2011, An Annual Comprehensive Study of the U.S. Publishing Industry”

Adaptive Learning Suite
Developments in Cognitive Science and

Artificial Intelligence Inspire New Adaptive
Learning Tools and Personalized Learning
Traditional methods of education—lectures, books and
blackboards—are not as effective for today’s digital
natives who live in a world driven by high-speed and highly
interactive communications.
New tools based on these and other Learners may someday—
concepts from cognitive science, regardless of age or education
such as ALEKS and LearnSmart, level—have continuous access to
promise to usher in an era of their own, individually tailored
greater academic achievement as artificial intelligence tutor—a
students and instructors become personalized avatar that focuses
more familiar with using them. on the particular strengths and
Instructors report that students This is particularly true for post- weaknesses of future students as
using LearnSmart are coming to secondary education, as most they study and reorganize their
class better informed, that they colleges already possess the internal knowledge structures for
resources necessary to deliver optimal performance.
are better prepared for exams, Web-based courses and home-
and that grades are improving work/study programs.
LearnSmart: An Adaptive Study System Based on

Cognitive Research
Grade Distribution* An important component of McGraw-Hill e-book or textbook content for
Connect, LearnSmart is an adaptive reinforcement, LearnSmart personal-
With LearnSmart more C students earn a B, more B students get an A study system based on cognitive izes the study environment based on
research designed to help college student needs. LearnSmart helps
% 30.5 33.5 22.6 8.6 4.7 students learn faster, study more focus students’ attention on the areas
efficiently, and retain more knowledge where they need to spend the most
for success. time, resulting in more efficient study
A B C D F time for today’s student and increased
With its ability to pinpoint a student’s readiness for lecture and exams.
% 19.3 38.6 28.0 9.6 4.9 knowledge gaps and direct the
student to the exact section of the
Without LearnSmart
* Based on an independent study of over 700 students studying Anatomy & Physiology I at six
distinct institutions across the country
Adaptive learning technology ALEKS®: Adaptive Assessment Determines Precisely

focuses on individual students’ What a Student Knows and Is Ready to Learn Next
strengths and weaknesses as ALEKS is a Web-based assessment Features include:
and learning system that uses
they take different learning paths Highlighting, bookmarking, and note taking
artificial intelligence and adaptive
directly within an e-book
questioning to quickly and accurately
determine what a student knows and An individualized study plan for students
Unique Learning Paths doesn’t know in a subject. ALEKS then with targeted instruction, step-by-step
instructs the student on the topics he explanations, and e-book references that
Students enter or she is most ready to learn next. are easily accessible
unique path
McGraw-Hill’s ALEKS 360 is a total Ability for instructors to assign homework,
mathematics solution that combines quizzes, and tests to reinforce critical concepts
ALEKS’ personalized learning
Students program with a fully integrated,
master interactive e-book directly from
subject within the student’s account.
www.aleks.com/highered/math/aleks360
32 McGraw-Hill
Institutional Solutions: Content, Technology, Services
McGraw-Hill Campus® McGraw-Hill Campus

McGraw-Hill Campus is a first-of-its-kind service that enables allows colleges to
McGraw-Hill to provide universal access to its digital content integrate McGraw-Hill’s
and tools directly from any campus portal. That means faculty content and course
and students will have true single sign-on to all course content solutions with any
and digital tools no matter what learning management system learning management
is being used on campus. More than 325 higher education system
institutions now have access.
Single sign-on Seamless

access to integration with
McGraw-Hill’s learning
digital content management McGraw-Hill
and tools systems MH AAIRS Campus
Middleware integrates
McGraw-Hill into McGraw-Hill
-Instant access Course Solutions
an institution’s
to McGraw-Hill -McGraw-Hill Connect
infrastructure and
Campus -McGraw-Hill LearnSmart
- Blackboard online presence
-All content free
-McGraw-Hill Tegrity
- WebCT
Faculty - Angel Learning
-McGraw-Hill Create
- Desire2Learn
- Moodle McGraw-Hill
Student - Sakai
Content Library
-E-books
-Instant access - eCollege -Assessment tools
to McGraw-Hill
Campus -Presentation slides
-Content: free and -Multimedia content
premium (paid) -Test banks
McGraw-Hill McGraw-Hill/Blackboard Partnership Expanded into Deep integration enhances the

International Markets user experience for faculty and
Connect and students including:
McGraw-Hill
McGraw-Hill Education took a major the on-campus Blackboard platform. Single Sign-on: A single Blackboard log-in for
Create are step to improve its connectivity with The release became available to access to McGraw-Hill Connect’s content,
available faculty and students by partnering with millions of college students in fall 2011. study tools, and instructor course manage-
worldwide Blackboard in 2010. Blackboard Learn™ ment tools
is the most widely installed learning Leveraging its U.S. relationship,
directly with management portal on college McGraw-Hill entered into a global Integrated Grade Book: Grades for assign-
Blackboard campuses in the U.S. and Canada. partnership with Blackboard in spring ments, quizzes, and tests post directly to the
The partnership led to an industry- 2011, allowing professors anywhere Blackboard grade book, eliminating the need
leading deep integration between in the world to integrate McGraw-Hill to manage two systems
McGraw-Hill’s Connect platform and Connect into their classrooms. Course Management for Instructors: Access
to McGraw-Hill Connect to manage course
content, create assignments, and track
student performance
www.DoMoreNow.com
McGraw-Hill Create™: Online Tool Enables Faculty to Customize Course Content

McGraw-Hill Create is an online
2. Arrange and Personalize: Instructors
custom publishing service that enables
arrange the selected content and add their
instructors to easily find trusted,
own original content, along with the
high-quality content and allows them
course syllabus
to adjust content exactly to their own
course syllabus.
3. Place Order Online: The instructor
1. Find and Add Content: Instructors search selects the e-book or print version.
and select content from a database of Students purchase the digital version
4,000 textbooks, 5,000 articles, 11,000 from the Create eBookstore or the hard
readings, and 25,000 business case studies copy from the campus bookstore
www.mcgraw-hillcreate.com

Meeting the Needs of Global Professionals
McGraw-Hill Education is aggressively leveraging digital devices,

formats, and channels to provide professional content to business,
medical, and technical customers around the world.
Serving Engaging and Interactive Content When

and Where Customers Want It
Interactive E-books
Digital Revenue McGraw-Hill has been an active “Enhanced” e-books offer additional More than 6,000 e-books
Growth: 2009–2011 player in e-book technology since the features, including interactive figures, video are available on devices
first e-book reader was launched interviews with experts, and assessments
more than 10 years ago. Today, with including Amazon’s Kindle,
CAGR: 146%
the growth of tablets and e-readers, Barnes & Noble’s Nook,
e-books are central to McGraw-Hill’s
publishing and growth strategy.
and Apple’s iPad
‘09 ‘10 ‘11
Digital revenue
grew by more
than 30% in the
first half of 2012
Mobile Applications
More than 30% Nearly 250 mobile applications are

available to help students and
of professional professionals study anytime, any-
revenue is from where for high-stakes tests including
digital products AP, SAT, ACT, and USMLE exams.
McGraw-Hill’s E-book Library

McGraw-Hill’s E-book Library is a The platform offers:
platform for institutional clients
worldwide, offering unlimited, Regular updates with new books
concurrent access to more than 1,000 and releases available throughout the
e-book titles in medicine, business, subscription term
engineering/computing, and student
Robust search capability with personalization
study skills and test preparation.
tools such as bookmarking and note taking
Web analytics that enable librarians to
www.mhebooklibrary.com monitor content usage
34 McGraw-Hill
Digital Subscriptions Serving the Needs of Medical McGraw-Hill’s Access platform

Schools and Hospitals Around the World enables universities, libraries,
and research institutions in
McGraw-Hill’s online medical specialty sites provide researchers, more than 65 countries to
subscribe to its trusted content
physicians, medical students, professors, and healthcare
from leading scientific,
professionals worldwide with integrated learning portals that technical, and medical titles
feature market-leading texts, animations, illustrations, videos,
interactive self-assessments, and curriculum tools.
AccessMedicine
Mobile is McGraw-Hill products can be found in 100% of
optimized for medical schools in Hong Kong and Singapore
mobile phones
and features a Access products are used in 95% of In Turkey, AccessMedicine is available to physicians
targeted subset U.S. and Canadian medical schools and students through 73 hospitals and schools
of content for
diagnosis Pakistan has adopted AccessMedicine for
all of its higher education institutions
Every medical school in Saudi Arabia

has access to AccessMedicine
JAMAevidence is used in 152 higher
education institutions in Brazil Digital products are available to all higher
education institutions in Nigeria
Online
AccessEngineering
Developed for engineering students
and professionals, AccessEngineering
AccessEngineering has provides hundreds of thousands of
pages of McGraw-Hill’s industry-
been adopted by more standard reference content, covering
than 500 engineering every major discipline in the field.
institutions in India
Leading brands include Perry’s Chemical
Engineers Handbook, Marks’ Standard Hand-
book for Mechanical Engineers, and Roark’s
Formulas for Stress and Strain
Online resources include instructional videos,
interactive graphs and tables, curriculum
guides, and daily engineering news feeds
www.accessengineeringlibrary.com

SCHOOL EDUCATION GROUP
Digital Solutions: Better Teaching, Better Learning
All of McGraw-Hill McGraw-Hill Education is a leading innovator in the development of 21st

Education’s content for century teaching and learning solutions for K–12 education markets, offering
elementary and secondary traditional and digital instructional, assessment and reference content, and
schools is available in tools for teachers and students. Critical areas in primary and secondary educa-
digital form tion are being addressed through McGraw-Hill’s Learning Solutions Centers:
• Literacy & Humanities
• STEM (Science, Technology, Engineering, and Math)
• Readiness & Intervention Solutions
McGraw-Hill created an additional Center to meet the challenges of
education in the 21st century—the Center for Digital Innovation. This
first-of-its-kind research and development center focuses on creating
technology-driven digital platforms and solutions that help engage children
in their own learning, create personalized learning paths to address their
individual needs, and raise achievement.
www.mheonline.com
Engaging Students In and Out of the Classroom

New Mobile Learning Apps All-Digital Curriculum for Math and Science
Math Games CINCH® Learning is a complete content and pull supporting resources
learning system, offering comprehen- from other grade levels to meet the
Available for the iPad, iPhone, and iPod sive content in math and science for individual needs of their students, or
Touch, these one- or two-player games grades 6–12. Designed for use as a add their own resources.
offer a quick and easy way for school- core instructional program, CINCH
aged children to practice and reinforce comprises two complete 6–12 CINCH Learning allows instructors to create
basic addition facts, number compari- curriculum strands and includes a compelling learning experience with:
sons, fraction concepts, and more. elementary support lessons for better, -Social networking tools that encourage
Math Games from differentiated learning. CINCH collaboration and communication
Everyday Mathematics® Learning is designed for use in an -Educational games that make learning fun
all-digital environment or can be used
in conjunction with a custom-print -Content, assessments, homework, and
solution. multimedia resources that are assigned to
each individual student based on specific
CINCH Learning helps teachers learning needs
engage today’s digital natives by CINCH Learning provides a unique planning
combining the power and flexibility of and teaching experience with:
classroom technology with McGraw-
Hill’s most current research-based -Material that is delivered through any
math and science programs. With device, including computers, tablets, and
CINCH Learning, teachers can plan, mobile devices
teach, assess, and differentiate -Cloud-based access to math and science
instruction from one robust online content that is fully customizable for
tool. Teachers can also customize districts, administrators, and teachers
www.mheonline.com/apps
CINCH Learning is
delivered through cloud
computing and represents
a new subscription
revenue model for the
6–12 market
www.mhecdi.com
36 McGraw-Hill
Digital Solutions to Increase Student Engagement,

Personalize Learning, and Drive Achievement
Exploring Abstract Math Transforming One-on-One Preparing Students for
Concepts through Digital Computing Classrooms with Success after High School
Visualization the Digital Teaching Platform
To address the problem of the
The most widely recognized digital Time To Know is a comprehensive growing number of students who are
math modeling tool in the market, curriculum and digital teaching platform unprepared to enter college or the
The Geometer’s Sketchpad ® allows that teachers use to manage all workforce, McGraw-Hill Education has
teachers and students to turn abstract classroom activities and to deliver a created a first-of-its-kind, all-digital
ideas about numbers, algebra, personalized curriculum to every student. program designed to promote
geometry, and more into concrete post-secondary success.
Students explore the content through
representations. Dynamic models allow
engaging animations, hands-on explorations The College & Career Readiness
students to construct relationship-based
of key concepts through applets, and program provides digital tools and
models to test and explore concepts.
personalized practice which leads to deeper guidance to students on a range of
Sketchpad is the signature product of
conceptual understanding topics including:
Key Curriculum, which was acquired
by McGraw-Hill Education in 2012. A real-time teacher dashboard provides Relevancy of academic course work to
notification of students’ progress and alerts real-world careers
Sketchpad was developed with funding teachers to those who need extra attention
from the National Science Foundation and assistance Transitional life skills, such as financial
and has been recognized with multiple literacy, leadership skills, and social skills
industry awards, including: McGraw-Hill Education announced an Financing college
exclusive licensing agreement in 2012
“Best Educational Software of All Time” by a
with Time To Know to develop an Navigating the college application process
survey of mentor teachers
all-digital, data-driven differentiated Choosing a career path
“Cool Tool Award” by 2011 EdTech Digest teaching and learning platform for
one-to-one computing classrooms.
Named Potential “Game Changer” in
Education by EdNet’s “Best of 2011”
www.keycurriculum.com www.timetoknow.com http://ready.ccr.mcgraw-hill.com
Power of U: Creating a McGraw-Hill Networks™:

New Classroom Experience A Social Studies Learning System
McGraw-Hill Education’s Power of U is McGraw-Hill Networks is a new
an all-digital math program designed research-based learning system for
to improve learning outcomes by social studies. Developed for grades
providing highly individualized 6–12, students use engaging resources
instruction and assessment. Each day’s to interact with history, geography,
lesson is tailor-made, based on each economics, government, and culture in
student’s progress the previous day. new ways that bring abstract concepts
to life and increase understanding.
The data-driven program uses an adaptive, In addition, students are involved in
personalized model to analyze what a student project-based learning which increases
knows and is ready to learn next critical thinking, engagement, and
Skills are taught using the most appropriate academic skill development.
www.mcgrawhillnetworks.com
instruction method: teacher-led, small group, Teachers can use the program as an all-digital
one-on-one tutoring, computer-assisted or hybrid print/digital learning system
instruction
In 2012, McGraw-Hill Networks received
Successful pilot studies in 2010, 2011, and several national education technology and
2012 improved math grades significantly industry curriculum awards

Assessment and Reporting Market:

Shaping the Pre-K–12 Learning Continuum
McGraw-Hill Education is a leader in testing—serving more than 18 million
students in all 50 states and globally across dozens of countries in the pre-K–12
and adult education markets. McGraw-Hill Education’s broad capabilities in test
development, data management, technology, test security, scoring, and reporting
support the development and management of customized assessment solutions
that can scale to all levels—national, state, district, and individual school.
Total Pre-K–12 Assessments: Revenue Estimates and Forecast Online assessment revenue
is projected to surpass
CAGR paper-and-pencil by 2015-2016
Testing Terminology Projected 2011-12 to
(dollars in millions) 2011-12 2012-13 2013-14 2014-15 2015-16 2015-16
Summative assessments: High-stakes state level
Once-a-year, high-stakes (summative) $1,074 $998 $1,072 $1,165 $1,194 3%
achievement assessments to Paper 608 585 446 219 192 (25%) Total Paper, Online Revenue
compare student performance Online 376 413 626 946 1,001 28% (dollars in millions)
nationally and/or provide valid $2,000 Projected 3-year CAGR
Classroom level
and reliable measures of learning (formative, interim,
and growth against standards test prep) $1,271 $1,340 $1,326 $1,427 $1,473 4%
+21%
1,500
Paper 1,004 1,047 1,003 1,077 1,084 2%
Interim (formative) and bench-
Online 267 293 322 351 389 10%
mark assessments: Tests given 1,000 -8%
throughout the school year that Total $2,344 $2,338 $2,388 $2,559 $2,631 3%
align with state and Common Core Paper 1,702 1,632 1,439 1,262 1,240 (8%) 500
Standards, diagnose progress, Online 643 706 948 1,296 1,391 21% ‘12 ’13 ’14 ’15 ’16
predict performance, and provide Paper Online
Source: Karen Raugust and the editors of Simba Information. “PreK-12 Testing Market Forecast
measures of performance growth 2012-2013” (Stamford, CT: Simba Information, 2012), page 58
Federal Funding and Assessments

In the U.S., the assessment market is responding to new forces, such In 2012, districts
as Common Core State Standards (CCSS), assessment consortia must spend
(Smarter Balanced and PARCC), Race to the Top, Investing in Innovation more than
(i3), School Improvement Grants, the National Educational Technology $2.5 billion of
Plan, and proposed Elementary and Secondary Education Act (ESEA) Title I funds
reforms to develop the next generation of assessments. The table below
carried over
summarizes the federal grants available for pre-K–12 education.
from 2011
Program Summary
McGraw-Hill Solutions Title I Title I provides financial assistance to Local Education
Support Federal Title I Agencies (LEAs) and schools with high numbers or high
and IDEA Funding percentages of poor children to help children meet
challenging state academic standards.
Acuity®
Race to the Top RTTT funds competitive state grants to advance reform
CTB Online Reporting System (RTTT) in four specific areas: standards and assessments; data
CTB Professional Development systems; effective teachers and principals; and turning
around low-performing schools. RTTT also funds Early Learn-
First Performances™ ing Challenge grants and a new district-level competition.
LAS Links® RTTT Common RTTT provides competitive funding to consortia of states
Core Assessment to develop assessments that are valid, support and inform
SUPERA
Programs instruction, measure the Common Core Standards, and
TerraNova™, Third Edition provide accurate information about what students know
and can do.
Writing Roadmap™
Investing in i3 provides competitive grants to applicants with a record
Yearly ProgressPro™ Innovation (i3) of improving student achievement in order to expand the
implementation of, and investment in, innovative practices.
School School Improvement Grants are used to strengthen student
Improvement achievement in schools identified as needing improvement,
Grants corrective action, or restructuring so as to enable those
schools to make Adequate Yearly Progress (AYP) and
www.CTB.com/Grants
demonstrate sustained progress.
IDEA IDEA provides grants to states and public educational
agencies to support special education for children with a
wide diversity of disabilities.
38 McGraw-Hill
Assessments from Online Paper and Pencil Handheld Student

Response Devices
are delivered in
multiple formats
Assessment and Reporting Solutions—Serving the Needs of All Learners

Pre-K–12
Reading and mathematics assessments and Standardized achievement tests in reading,

instructional guidance for pre-K through language arts, mathematics, science, and
Yearly ProgressPro™ is based on 25 years
grade 3 students; monitors student progress social studies available in paper-and-pencil
of research and is used extensively
toward state standards format and online. Compares student
in Response-to-Intervention programs in
(Grades pre-K–3) performance against their national peers
schools and districts across the U.S. to raise
www.CTB.com/FirstPerformances based on empirical norms and measures
student achievement. Students work online
student growth within and across school years.
McGraw-Hill TerraNova Common Core is aligned to the
and their progress is captured in a data
management system that allows teachers to
Education Common Core State Standards and features
monitor progress in real time
was selected Personalized parent engagement plans based innovative items that deliver an authentic
(Grades 1–8)
on student assessment results. Provides families measure of higher order thinking skills and an
by the increased depth of knowledge www.CTB.com/YearlyProgressPro
with immediate 24/7 online access to their
Smarter child’s test results (Grades K–12)
Balanced www.CTB.com/Services/ www.CTB.com/TerraNova3
Assessment CustomOnlineReporting
An online essay scoring tool utilizing artificial
Consortium intelligence that provides continual practice
to develop and automatic feedback. Its easy-to-use
the first set interface and instructional tools motivate and
Award-winning interim and benchmark English- and Spanish-Language Proficiency guide students through each step of the
of test items assessment solution that informs teaching and Assessment—a comprehensive and writing process
for the new improves student learning. Acuity is aligned integrated system of assessment, (Grades 3–12, college and adult learners)
to the Common Core State Standards and instructional placement, instructional
Common Core guidance, and support for all English-
www.CTB.com/WritingRoadmap
includes performance tasks and technology-
assessments enhanced items. Available in online and language learners. LAS Links is available
paper-and-pencil formats in online and paper-and-pencil formats
(Grades K–12) (Grades pre-K–12)
www.CTB.com/Acuity www.CTB.com/LASLinks
Adult Diagnostic assessments and instructional students. TABE is available in adaptive, online,
support for adult students, including Basic and paper-and-pencil formats
Education and English as a Second Language www.CTB.com/TABE
Diagnostic and Predictive Benchmark Assessments

Industry for the Formative Market
Awards for
Acuity Acuity® CCSS in high school and monitor Acuity is used by more
student progress toward college and
The Software & Acuity, an InFormative Assessment™ career readiness. than 100,000 teachers
Information Industry solution, is an award-winning assess-
Association (SIIA) ment program that helps teachers Acuity contains all the elements of a and 1.5 million students
has recognized gauge student performance and comprehensive assessment system:
Acuity in the “Best deliver data-driven instruction for
Student Assessment Standards-aligned, pre-built assessments for
every student. Acuity features a suite state and Common Core State Standards
Solution” category of diagnostic and predictive formative,
benchmark, and interim assessments Instructional resources
designed to measure student growth
24/7 access to reports that indicate if interven-
toward state standards and the
tions are required and reflect student growth
Common Core State Standards in read-
ing, English/language arts, and Ability to customize assessments www. CTB.com/Acuity
mathematics. Assessments align to

Pre-K–16 Public Education:

Funding, Expenditures, and Enrollments
Growth in Public Education Funding
The 2013 federal budget was submitted to Congress by President Obama in
February 2012. The request included increasing spending on elementary and
secondary education programs to $38.5 billion, a 1.2% increase compared to
2012 levels. If enacted, higher education expenditures would increase 4.6%
to $28 billion, compared to 2012. The actual appropriations for fiscal year 2013
(October 2012—September 2013) must be authorized by the full Congress
before the budget can take effect.
Funding for pre-K–12 education in the United States Public school systems
reached approximately $594 billion in the 2009-10
school year. State and local governments contributed
received $593.7 billion
87.5% of this total and the federal government in funding in 2010, an
provided 12.5%. In any given year, more than increase of 0.5% from
two-thirds of state funding comes from sales and
income tax. At the local level, property taxes account- 2009
ed for approximately 65% of the local funding total.
The Public Education Dollar: Sources of State Funding Sources of Local Funding
Revenues by Source Total State Revenue: $258.2 billion Total Local Revenue: $261.4 billion
Total Revenue: $593.7 billion
Federal 12.5% Sales and Property Taxes 64.8%

Income Tax 68.4%
State 43.5% Other 35.2%
Other 31.6%
Local 44.0%
Source: U.S. Census Bureau, “Public Education Finances: 2010,” June 2012
46 states’ fiscal year is Other fiscal years:
July 1 to June 30 Apr. 1 – Mar. 31 New York

Sept. 1 – Aug. 31 Texas
Oct. 1 – Sept. 30 Alabama and Michigan
Increasing Expenditures for Students

By the 2020–21 school year, Current and Projected Expenditures per Pupil in K–12
expenditures are projected to (in thousands, in constant 2008–2009 dollars)
increase by 14% to slightly more $12 Projected
than $11,900 per student.
9
3
‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20
9.9 10.2 10.4 10.4 10.4 10.4 10.4 10.4 10.5 10.8 11.0 11.2 11.4 11.6 11.8 11.9
Source: U.S. Department of Education, National Center for Education Statistics,
"Projections of Education Statistics to 2020," September 2011
40 McGraw-Hill
Growing Enrollments
In the United States, school enrollments continue to rise across the entire
pre-K–16 student population.
By 2020, 57.9 million students will be enrolled in grades pre-K–12, according
to the latest projections by the National Center for Education Statistics. Enroll-
ment in degree-granting higher education institutions is projected to increase
by 13% to 23.0 million students in 2020.
Public School Pre-Kindergarten Enrollment, 2002–2010

(number of students in thousands)
1,400
1,050
700
350
‘02-’03 ‘03-’04 ‘04-’05 ‘05-‘06 ‘06-‘07 ‘07-‘08 ‘08-’09 ‘09-’10
915 950 990 1,036 1,084 1,081 1,180 1,223
Common Core of Data
Enrollment in pre- Enrollment in Elementary and Secondary Institutions

(enrollment in millions)
Kindergarten through
60
grade 8 is projected to Projected
increase by 8% between 45
2008 and 2020

30
15
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20
PK-8 38.7 38.6 38.6 38.7 38.9 39.2 39.4 39.6 39.9 40.2 40.6 40.9 41.3 41.7
9-12 16.5 16.4 16.2 16.0 15.8 15.7 15.7 15.8 16.0 16.0 16.0 16.1 16.1 16.3
Total 55.2 55.0 54.8 54.7 54.7 54.9 55.1 55.5 55.8 56.2 56.6 57.0 57.4 57.9
Enrollment in U.S. Higher Education Institutions

(enrollment in millions)
20 Projected
24 years and younger
15 25 years and older
10
5
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20
≤24 11.2 11.6 12.3 12.5 12.6 12.6 12.7 12.8 12.9 12.9 13.0 13.1 13.2 13.4
≥25 7.1 7.5 8.1 8.1 8.1 8.1 8.3 8.5 8.8 9.0 9.3 9.5 9.6 9.6
Total 18.2 19.1 20.4 20.6 20.7 20.7 20.9 21.3 21.7 22.0 22.3 22.5 22.8 23.0

Growing Enrollments in Key Adoption States
Mapping the Adoption Process

In the adoption process, a state education board selects elementary
and secondary textbooks to be placed on an approved list. To use state
education funds, local school districts must choose textbooks from the
approved list. In adoption states, the state board issues curriculum
guidelines and schedules the purchase of new books in each subject
area. In the remaining states, known as “open territories,” textbooks
are purchased independently by local school districts or individual
schools. There are no statewide purchasing schedules or state-selected
lists of textbooks.
Changing U.S. Pre-K–12 Enrollment by Region and State, 2008–2020
Northeast:
– 3.0%
Midwest:
– 1.0% WA
ME
MT ND
West: VT
OR MN
+ 13.0% ID
SD WI NY NH
WY
MI MA
RI
IA PA CT
NE
NV
IL IN
OH NJ Total U.S. Enrollment
UT
CA CO KS MO
DE Growth: 6.9%
WV VA MD
KY Between 2008 and 2020 enrollment
NC in public elementary and secondary
AZ TN
NM OK schools is projected to increase in
AR SC
36 states as well as the District of
AL
MS GA Columbia and decline in 14 states,
TX LA translating into a 6.9% national increase
South: in public school enrollment overall.
+ 10.0% FL
AK
Projected Enrollment Growth in Key
Adoption States, 2008–2020
HI
Texas 22.7%
■ Adoption States (20 States) ■ Open Territories (30 States) North Carolina 15.1%
States in which school districts must purchase States in which schools purchase educational Florida 5.9%
educational materials that have been materials independently Virginia 9.4%
“adopted” at the state level in order to qualify Notes:
for state funding California adopts for grades K–8; grades 9–12 California 9.3%
are open territory
Source: U.S. Department of Education, National Center
Utah and Oregon issue state-recommended lists, for Education Statistics, “Projections of Education
but do not tie textbook choices to funding Statistics to 2020,” September 2011
Industry Textbook Sales

Adoption States, Open Territories
(Pre-K–12)
(dollars in millions)
$2,500
1,875
1,250 Source: AAP, “2010 Annual Industry Statistics,” as

reported by 5 publishers. Includes non-specified
625 materials. Excludes non-domestic sales of $146
million, $106 million, and $113 million for 2010,
‘08 ‘09 ‘10 2009, and 2008, respectively. Also excludes
Adoption States ($) 2,132 1,605 1,865 domestic Advanced Placement sales of $156
million, $153 million, and $154 million for 2010,
Open Territories ($) 1,904 1,677 1,544 2009, and 2008, respectively
42 McGraw-Hill
Pre-K–12 Market Sales
In 2011, sales of textbooks and educational Total Net Elementary/High School Sales Effective January 1, 2010,
Instructional Materials the “basal” and
materials for the pre-K–12 school market (dollars in millions) “supplemental”
categories in AAP’s
decreased 9.4% to $3.3 billion, according to elementary-high school
$4,000
the Association of American Publishers. statistics were combined
into a single “instruc-
3,000 tional materials”
Annual spending for digital materials category, reflecting shifts
2,000 in the academic product
increased 33% and represented nearly marketplace, as many
20% of the total market in 2010* 1,000 instructional materials are
now used for both “basal”
‘09 ‘10 ‘11 and “supplemental”
*Source: The Book Industry Study Group, Inc. (BISG) and Association of American
6–12 1,413 1,438 1,272 purposes in order to
Publishers (AAP), “BookStats 2011, An Annual Comprehensive Study of the
U.S. Publishing Industry” Pre-K–6 2,061 2,171 1,999 maximize teaching and
learning. This change
Total $3,475 3,609 $3,271 reflects trends in the
Source: AAP, “Monthly El-Hi Book Publishing Sales Report,” elementary-high school
Note: Detailed annual 2011 data was not available at the time the 2012 December 2010 and December 2011, as reported publishing industry and
Investor Fact Book was issued by 9 publishers. Includes sales of U.S. products only the market it serves.
Pre-K–6 Net Sales by State (1) 6–12 Net Sales by State (1)
Instructional Materials Instructional Materials
% of % of
2010 2010
(dollars in thousands) 2010 total 2009 2008 (dollars in thousands) 2010 total 2009 2008
1 Texas $ 343,294 17.5% $ 183,023 $ 238,442 1 Texas $ 256,046 18.9% $ 62,987 $ 65,975
2 California 227,799 11.6% 235,253 306,340 2 Florida 119,362 8.8% 66,054 60,689
3 Florida 147,128 7.5% 85,222 172,112 3 California 105,676 7.8% 165,468 264,390
Top 3 for 2010 $ 718,221 36.6% $ 503,498 $ 716,894 Top 3 for 2010 $ 481,084 35.5% $ 294,509 $ 391,054
4 New York 116,649 5.9% 133,030 145,933 4 New York 82,873 6.1% 82,716 122,791
5 Pennsylvania 99,110 5.1% 96,946 93,377 5 Pennsylvania 58,354 4.3% 59,560 62,151
6 Illinois 88,584 4.5% 86,506 124,401 6 Illinois 55,695 4.1% 93,201 76,675
7 New Jersey 67,697 3.5% 77,332 76,141 7 Ohio 45,225 3.3% 57,700 55,218
8 Michigan 63,831 3.3% 53,288 41,109 8 Tennessee 42,108 3.1% 53,798 47,048
9 Ohio 55,656 2.8% 68,932 66,908 9 New Jersey 39,287 2.9% 44,615 53,855
10 Georgia 46,309 2.4% 66,459 89,321 10 Michigan 37,994 2.8% 36,320 46,803
Top 10 for 2010 $ 1,256,057 64.0% $ 1,085,991 $ 1,354,084 Top 10 for 2010 $ 842,620 62.2% $ 722,419 $ 855,595
11 North Carolina 35,353 1.8% 59,928 51,152 11 Georgia 34,487 2.5% 44,147 92,072
12 Indiana 32,290 1.6% 40,361 39,332 12 Indiana 31,015 2.3% 52,774 72,186
13 Missouri 31,046 1.6% 34,598 37,012 13 Virginia 27,180 2.0% 25,475 30,156
14 Massachusetts 30,947 1.6% 30,950 32,479 14 Maryland 26,160 1.9% 29,077 34,441
15 Virginia 28,442 1.4% 35,856 35,050 15 North Carolina 22,498 1.7% 20,422 59,270
Top 15 for 2010 $ 1,414,135 72.1% $ 1,287,684 $ 1,549,109 Top 15 for 2010 $ 983,960 72.6% $ 894,314 $ 1,143,720
All Others $ 547,860 27.9% $ 571,876 $ 739,524 All Others $ 371,304 27.4% $ 428,499 $ 550,326
Total Domestic U.S. $ 1,961,995 100.0% $ 1,859,560 $ 2,288,633 Total Domestic U.S. $ 1,355,264 100.0% $ 1,322,813 $ 1,694,046
Pre-K–6 Sales by Subject Category (2) 6–12 Sales by Subject Category (2)
% of % of % of % of % of % of
2010 2009 2008 2010 2009 2008
(dollars in millions) 2010 total 2009 total 2008 total (dollars in millions) 2010 total 2009 total 2008 total
Reading / Literature $ 963 46.9% $ 825 43.0% $ 994 42.1% Reading / Literature $ 360 25.8% $ 198 14.6% $ 243 14.1%
Mathematics 653 31.8% 614 32.0% 712 30.2% Mathematics 326 23.4% 295 21.8% 380 22.0%
Interdisciplinary 193 9.4% 127 6.6% 104 4.4% Science 170 12.2% 222 16.4% 318 18.4%
Language Arts / English 71 3.5% 93 4.9% 104 4.4% Social Studies 150 10.8% 216 15.9% 278 16.1%
Science 64 3.1% 102 5.3% 200 8.5% Foreign Language 93 6.7% 106 7.8% 124 7.2%
Social Studies 54 2.7% 78 4.1% 136 5.8% Language Arts / English 89 6.4% 106 7.8% 147 8.5%
Computer / Technology 19 0.9% 24 1.2% 17 0.7% Interdisciplinary 86 6.2% 68 5.0% 71 4.1%
Music 16 0.8% 20 1.0% 39 1.7% Business Education 33 2.4% 37 2.7% 46 2.7%
All Others 21 1.0% 37 1.9% 52 2.2% All Others 87 6.2% 109 8.0% 120 6.9%
Total $2,054 100.0% $1,920 100.0% $2,359 100.0% Total $1,393 100.0% $1,357 100.0% $1,727 100.0%
(1) Source: AAP, “2010 Annual Industry Statistics,” as reported by 5 publishers. State ranking
varies each year in accordance with adoption cycle
(2) Source: AAP, “2010 Annual Industry Statistics,” as reported by 5 publishers. Excludes
non-specified and Advanced Placement sales
El-Hi Adoption Opportunities
Adoption states select print and digital instructional materials for one or more core disciplines
each bid/purchase year. Adoption cycles vary by state. Generally most operate on a six- or seven-
year cycle and a few are on a shorter cycle (i.e., three, four, five years). Over the last few years
states have elongated their cycles for adopting new materials. Elementary and secondary
adoption schedules provide some visibility into the state new adoption market for several years.
The presence or absence of adoption states with large student enrollments—such as California,
Florida, and Texas—will influence the size of the market opportunity each year.
Elementary School Adoption Schedule

Bid Year 2011 2012 2013 2014 2015 2016 2017
Purchase Year 2012 2013 2014 2015 2016 2017 2018
Reading Mississippi Alabama Oregon (CCSS) Georgia New Mexico – Oklahoma (PK-5)
Virginia (K-5) California (CCSS) 1 West Virginia Texas (K-5)
Florida (K-5) West Virginia 1
Idaho (K-5)
Louisiana (K-5)
Oklahoma (PK-5)
Tennessee
Mathematics Alabama Arkansas Louisiana (3-6) Idaho West Virginia 1 Oklahoma Alabama
California (CCSS) 1 Texas Oregon (CCSS) Tennessee (K-5) West Virginia
Florida (K-5) West Virginia 1 West Virginia 1
Georgia
Louisiana (K-2)
Mississippi
New Mexico
Oregon (CCSS) 1
South Carolina
West Virginia 1
Social Studies Florida Oklahoma Alabama Arkansas Virginia Florida –
Oregon West Virginia Tennessee Louisiana West Virginia 1 Idaho
West Virginia 1 Texas New Mexico
West Virginia 1 West Virginia 1
Science Idaho – Georgia 1 Arkansas Florida Louisiana Idaho
New Mexico North Carolina Alabama Oregon West Virginia 1 West Virginia 1
Texas (Sup’l Science) (5-6) Oklahoma Tennessee West Virginia 1
Virginia Texas West Virginia 1
West Virginia
Language Arts/ Oklahoma Alabama Mississippi Georgia West Virginia – Oklahoma (PK-5)
English South Carolina (K-5) California (CCSS) 1 Oregon (CCSS) Texas (K-5)
Florida (K-5) West Virginia 1
Idaho (K-5)
Louisiana (K-5)
Oklahoma (PK-5)
Oregon (CCSS) 1
Health (H) Louisiana (H, PE) Arkansas (H, PE) West Virginia (H) Mississippi (H, PE) Idaho (H, PE) Louisiana (H, PE) Alabama (H, PE)
Physical New Mexico (H, PE) South Carolina Tennessee Oklahoma (H) Oregon (H, PE) West Virginia (H) 1
Education (PE) South Carolina (H) (H Science) 1 West Virginia (H) 1 West Virginia (H) 1 West Virginia (H) 1
Art (A) Louisiana (A, M) Alabama (S) Mississippi (A, M, D) Texas (A, M) Alabama (A, M, D) West Virginia (A, M) 1 Louisiana (A, M)
Music (M) Oklahoma (S) Idaho (S) (K-5) Oklahoma (A, M) West Virginia Idaho (A, M, D) Tennessee (A, M)
Drama (D) Tennessee (A, M) New Mexico (A, M) West Virginia (A, M) 1 West Virginia (A, M) 1
Speech (S)
Spelling Tennessee (1-6) Alabama Mississippi Georgia – – Oklahoma (PK-5)
Idaho (K-5) Tennessee (1-6)
Oklahoma (PK-5)
Literature – Alabama – – – – –
California (CCSS) 1
Florida (K-5)
World South Carolina South Carolina – Florida Alabama West Virginia Oregon
Languages (American Sign (American Mississippi Georgia West Virginia 1
Language) Sign Language) Virginia Idaho
Oklahoma
Texas
Computer Arkansas Idaho Idaho Florida Idaho Alabama Idaho
Education Idaho Texas Idaho Oklahoma Idaho
Tennessee (1-6) Louisiana
English as a – Oklahoma (PK-5) – – Tennessee (1-6) – Louisiana
Second Language Oklahoma (PK-5)
(ESL)
Handwriting Louisiana Alabama Mississippi – – – Louisiana
Idaho (K-5) Oklahoma (PK-5)
Oklahoma (PK-5)
Dictionaries – Alabama Mississippi Georgia – – Oklahoma (PK-5)
Idaho (K-5)
Oklahoma (PK-5)
Source: AAP School Division/National Association of State Textbook Administrators (NASTA) (1) Mid-contract adoptions and/or reviews in response to Common Core State Standards (CCSS)
Notes: Elementary adoptions are for grades PK–6, unless otherwise noted may not generate contracts or provide allocated funds
Secondary adoptions are for grades 6–12, unless otherwise noted
Adoption opportunities provided for information only as timelines are tentative based
on state funding and implementation of standards
Adoption cycle details pending state’s invitation to bid
44 McGraw-Hill
46 states and the District of Columbia have adopted the

Common Core State Standards (CCSS)—a shared set of English/
Language Arts and math standards—as of spring 2012. States will
adopt instructional materials that incorporate the new standards,
beginning as early as the 2012/2013 bid/purchase year
Secondary School Adoption Schedule

Bid Year 2011 2012 2013 2014 2015 2016 2017
Purchase Year 2012 2013 2014 2015 2016 2017 2018
Mathematics Alabama Arkansas Florida Idaho West Virginia 1 Oklahoma Alabama
South Carolina (9-12) 1 California (CCSS) (6-8) 1 Louisiana Oregon (CCSS) Tennessee West Virginia
Georgia Texas (6-8) Texas (9-12)
Louisiana West Virginia 1 West Virginia 1
Mississippi
New Mexico
Oregon (CCSS) 1
South Carolina (6-8)
West Virginia (6-8) 1
Science Idaho – Georgia Alabama Florida Louisiana Idaho
New Mexico North Carolina Arkansas Oregon West Virginia 1 West Virginia 1
South Carolina (9-12) 1 Oklahoma Tennessee West Virginia 1
Texas (Sup’l Science) Texas West Virginia 1
Virginia West Virginia
Social Studies Florida Mississippi Alabama Arkansas Virginia Florida –
Oregon Oklahoma Tennessee Louisiana West Virginia 1 Idaho
South Carolina West Virginia 1 Texas New Mexico
West Virginia West Virginia 1 West Virginia 1
Literature Mississippi Alabama Florida Georgia Georgia (9-12) – Tennessee
Tennessee California (CCSS) 1 Louisiana New Mexico (9-12) New Mexico (6-8)
Virginia Oklahoma
Reading Mississippi (6-8) Alabama Florida Georgia New Mexico (6-8) West Virginia (9-12) 1 West Virginia 1
California (CCSS) 1 Idaho New Mexico (9-12) West Virginia
Oklahoma Louisiana Oklahoma
Tennessee (6-8) Oregon (CCSS)
Language Arts/ Oklahoma Alabama Florida Georgia (6-8) Georgia (9-12) West Virginia (9-12) 1 West Virginia 1
English South Carolina (9-12) 1 California (CCSS) (6-8) 1 Idaho New Mexico (9-12) Tennessee
Virginia Oregon (CCSS) 1 Louisiana Oklahoma West Virginia
South Carolina Mississippi
Oregon (CCSS)
World Louisiana South Carolina – Florida Alabama West Virginia Louisiana
Languages South Carolina (American Sign Mississippi Georgia (9-12) Oregon
(American Sign Language) New Mexico Idaho West Virginia 1
Language) (Fr, Span, Latin) (9-12) New Mexico (Fr, Span 6-8)
Virginia Oklahoma
Tennessee
Texas
Business Georgia – New Mexico Florida Louisiana Alabama Tennessee
Education South Carolina Idaho Oklahoma Texas
Tennessee
Computer Arkansas Idaho Idaho Florida Idaho Alabama Idaho
Education Georgia Oklahoma (9-12) Texas Idaho Oklahoma (9-12) Idaho Tennessee
Idaho Louisiana
South Carolina
Tennessee
Health (H) Louisiana (H, PE) Arkansas (H, PE) West Virginia (H) Florida (9-12) Idaho (H, PE) Louisiana (H, PE) Alabama (H, PE)
Physical Education New Mexico (H, PE) South Carolina Mississippi (H, PE) Oklahoma (H, PE) Oregon (H, PE) Tennessee (H Science) (9-12)
(PE) Tennessee (H Science) (H Science) Tennessee West Virginia (H) 1 West Virginia (H) 1 West Virginia (H) 1
(9-12) West Virginia (H) 1
Family/ Georgia – New Mexico Idaho – – –
Consumer Mississippi
Science Tennessee
Art (A) Louisiana (A, M) Alabama (S) Idaho (S) Oklahoma (S) Alabama (A, M) (D) West Virginia (A, M) 1 Louisiana (A, M)
Music (M) Oklahoma (S) New Mexico (A, M) Mississippi (A, M) (D) Texas (A, M) Idaho (A, M) (D) Tennessee (A, M) (D 9-12)
Drama (D) Tennessee (A, M) (D 9-12) (D 9-12) Oklahoma (A, M) (D 9-12) West Virginia West Virginia (A, M) West Virginia (A, M)
Speech (S)
Vocational/ Georgia South Carolina New Mexico Florida Louisiana Alabama Tennessee
Technical Louisiana Idaho Oklahoma Texas West Virginia 1
Education Tennessee West Virginia 1 West Virginia 1
Career/ Georgia – New Mexico (9-12) Florida (9-12) Louisiana Alabama Tennessee (9-12)
Workforce Louisiana Idaho Oklahoma Texas
Education Tennessee (9-12) West Virginia (9-12)
Driver Tennessee (9-12) – New Mexico (9-12) Alabama (9-12) Idaho West Virginia 1 Tennessee (9-12)
Education Arkansas (9-12) West Virginia 1 West Virginia 1
Mississippi (9-12)
West Virginia (9-12)

Notes
46 McGraw-Hill
Financial Review
Eleven-Year Financial Review

The 2012 Investor Fact Book provides an historical, eleven-year financial
review of The McGraw-Hill Companies.
To reflect changes being created by the Growth and

Value Plan, new names for some operations were
introduced:

(formerly Standard & Poor’s segment)
S&P Capital IQ/S&P Indices

(formerly McGraw-Hill Financial segment)
Commodities & Commercial Markets

(formerly Information & Media segment)
After separation, the newly named McGraw-Hill

Financial will report financial results for five lines
of business:
S&P Capital IQ
S&P Dow Jones Indices(1)
Commodities
Commercial Markets
Notes: Results for the four current operating segments have been recast on an annual basis for six years (2006–2011) and on a
quarterly basis for 2011 and 2010
Results have not been recast for the years 2001 to 2005
In this presentation, the segment noted as “Combined S&P Ratings, S&P Capital IQ/S&P Indices” was formerly named
“Financial Services” from 2001 to 2009
A summary of items affecting comparability of results is provided on pages 62 and 63
(1) The S&P Dow Jones Indices joint venture was launched on June 29, 2012

The McGraw-Hill Companies:
Committed to Creating Shareholder Value
A record of strong free cash 39th Consecutive Year $1 Billion in Share Repurchases $500 Million Accelerated Share
of Dividend Increases Repurchase Program
flow enables The McGraw-Hill In 2011, the Company spent $1 billion
Companies to return substantial In January 2012, the Board of on share repurchases: 26 million The Company also entered into
Directors increased the dividend shares from the 2011 repurchase a $500 million accelerated share
capital to shareholders for the 39th consecutive year authorization and an additional repurchase program in December 2011
8 million shares, which completed
while continuing to invest in Since 1974, MHP’s annual dividend the 2007 repurchase authorization The majority of the shares were
has grown at an average compound delivered in 2011 and the accelerated
high-growth global brands rate of 9.6% 24 million shares remained in the 2011 share repurchase program was
and businesses. As part repurchase program at year end completed in April 2012
of the Growth and Value
Plan, the Company spent The Company has returned more than
$1.5 billion to repurchase
$11.5 billion to shareholders since 1996,
35.7 million shares between
including $1.8 billion in 2011
January 2011 and April 2012.
Free Cash Flow

Years ended December 31
(dollars in millions) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Cash provided by
operating activities $ 1,344 $ 1,458 $ 1,330 $ 1,178 $ 1,721 $ 1,511 $ 1,561 $ 1,064 $ 1,383 $ 1,143 $ 1,100
Investment in prepublication costs (158) (151) (177) (254) (299) (277) (258) (238) (218) (249) (295)
Capital expenditures (119) (115) (92) (131) (246) (150) (137) (150) (143) (125) (146)
Free cash flow before dividends $ 1,067 $ 1,192 $ 1,061 $ 793 $ 1,176 $ 1,084 $ 1,166 $ 676 $ 1,022 $ 769 $ 659
Dividends paid to shareholders (296) (292) (281) (281) (278) (260) (246) (228) (207) (197) (190)
Dividends paid to noncontrolling
interests (12) (19) (9) (9) (4) (2) (1) – – – –
Tax payment/(dividend) from
divestitures (1,2,3) 48 – – – – – – 172 (104) – –
Free cash flow after dividends $ 807 $ 881 $ 771 $ 503 $ 894 $ 822 $ 919 $ 620 $ 711 $ 572 $ 469
(1) 2011, $48 million tax payment on gain from disposition of the Broadcasting Group
(2) 2004, $172 million tax payment related to a 2003 gain from sale of real estate
(3) 2003, $104 million dividend received from the sale of the Company’s equity interest in real estate
Net (Cash) Debt to EBITDA

Years ended December 31
Cash and equivalents &
short-term investments $ 973 $ 1,548 $ 1,210 $ 472 $ 396 $ 354 $ 749 $ 681 $ 696 $ 58 $ 54
Total debt 1,198 1,198 1,198 1,268 1,197 3 3 5 26 578 1,057
Net (cash) debt $ 225 $ (350) $ (12) $ 796 $ 801 $ (351) $ (746) $ (676) $ (670) $ 520 $ 1,003
Net (cash) debt to EBITDA 0.1x (0.2x) 0.0x 0.5x 0.5x (0.2x) (0.5x) (0.5x) (0.5x) 0.5x 1.3x
Note: EBITDA is net of investment in prepublication costs
Cash Returned to Shareholders

10-year
(dollars in millions, except S&P 500 dividend) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 CAGR
MHP dividends paid $ 296 $ 292 $ 281 $ 281 $ 278 $ 260 $ 246 $ 228 $ 207 $ 197 $ 190 4.5%
MHP shares repurchased 1,500 256 – 447 2,213 1,540 678 409 216 183 177 23.8%
Total $ 1,796 $ 548 $ 281 $ 728 $ 2,491 $ 1,800 $ 924 $ 637 $ 423 $ 380 $ 367 17.2%
MHP growth N/M 95% (61%) (71%) 38% 95% 45% 51% 11% 4% 5%
S&P 500 dividend $ 26 $ 23 $ 22 $ 28 $ 28 $ 25 $ 22 $ 19 $ 17 $ 16 $ 16 5.0%
S&P 500 growth 13% 1% (21%) 2% 11% 12% 14% 12% 8% 2% (3%)
Note: Shares repurchased are reported on a settlement-date basis

N/M indicates a non-meaningful or non-calculable variance
48 McGraw-Hill
Financial Review
Consolidated Profit and Loss
Consolidated Profit and Loss
(in millions, except per share data) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Total revenue $ 6,246 $ 6,072 $ 5,870 $ 6,355 $ 6,772 $ 6,255 $ 6,004 $ 5,251 $ 4,890 $ 4,708 $ 4,534
Total expenses 4,624 4,479 4,484 4,871 4,935 4,665 4,509 3,950 3,789 3,695 3,768
Total operating profit 1,622 1,593 1,386 1,484 1,837 1,590 1,495 1,301 1,101 1,013 766
General corporate income/(expense) (200) (180) (127) (109) (160) (163) (125) (124) 38 (92) (93)
Interest (expense), net (75) (82) (77) (76) (41) (13) (5) (6) (7) (22) (55)
Income from continuing operations
before taxes on income 1,347 1,331 1,182 1,299 1,636 1,414 1,365 1,171 1,132 899 618
Provision for taxes on income 489 483 429 480 609 523 516 413 442 325 238
Effective tax rate 36.3% 36.3% 36.3% 36.9% 37.2% 37.0% 37.8% 35.2% 39.1% 36.2% 38.6%
Income from continuing operations $ 858 $ 848 $ 753 $ 819 $ 1,027 $ 891 $ 849 $ 758 $ 690 $ 574 $ 380
Discontinued operations
Net earnings/(loss) from
discontinued operations 76 4 (3) – – – – (1) (0) 4 (1)
Net income 934 852 750 819 1,027 891 849 757 690 578 379
Less: Net income attributable to
noncontrolling interests (23) (24) (19) (20) (13) (9) (5) (2) (2) (1) (2)
Net income attributable to
The McGraw-Hill Companies $ 911 $ 828 $ 731 $ 799 $ 1,014 $ 882 $ 844 $ 755 $ 688 $ 577 $ 377
Diluted earnings per share
Income from continuing operations $ 2.75 $ 2.64 $ 2.34 $ 2.51 $ 2.94 $ 2.40 $ 2.21 $ 1.96 $ 1.79 $ 1.47 $ 0.96
Discontinued operations 0.25 0.01 (0.01) – – – – – – 0.01 –
Net income $ 3.00 $ 2.65 $ 2.33 $ 2.51 $ 2.94 $ 2.40 $ 2.21 $ 1.96 $ 1.79 $ 1.48 $ 0.96
Revenue and Operating Profit Diluted EPS

(dollars in millions) (in dollars)
$7,000 $3.00
5,250 2.25
3,500 1.50
1,750 0.75
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Revenue ($) 4,534 4,708 4,890 5,251 6,004 6,255 6,772 6,355 5,870 6,072 6,246 .96 1.48 1.79 1.96 2.21 2.40 2.94 2.51 2.33 2.65 3.00
Operating profit ($) 766 1,013 1,101 1,301 1,495 1,590 1,837 1,484 1,386 1,593 1,622
Note: Details may not sum to total and percentages may not recalculate due to rounding
Operating Segments at a Glance
Standard & Poor’s Ratings Services (formerly named Standard & Poor’s)
2011 Revenue 2011 Operating Profit Segment Revenue and Operating Profit and Margin
$1.8 billion $719 million (dollars in millions) 2011 2010 2009
28.3% of total revenue 44.3% of total Revenue $ 1,767 $ 1,695 $ 1,537
operating profit
Operating profit $ 719 $ 762 $ 712
Operating profit margin 40.7% 45.0% 46.3%
28.3% 44.3%
S&P Capital IQ/S&P Indices (formerly named McGraw-Hill Financial)
operating profit
S&P Capital IQ 16.5%
S&P Indices 5.2% 24.9%
Segment Revenue by Group

(dollars in millions) 2011 2010 2009
S&P Capital IQ $ 1,031 $ 916 –
S&P Indices $ 323 $ 273 –
Commodities & Commercial Markets (formerly named Information & Media)
$896 million $180 million (dollars in millions) 2011 2010 2009
14.3% of total revenue 11.1% of total Revenue $ 896 $ 811 $ 873
operating profit
Commodities 6.7%
Commercial 7.6% 11.1%

Commodities $ 419 $ 344 –
Commercial Markets $ 477 $ 467 –
operating profit
HPI 21.5%
SEG 15.2% 19.7%

Higher Education, Professional
and International Group (HPI) $ 1,343 $ 1,324 $ 1,275
School Education Group (SEG) $ 949 $ 1,109 $ 1,112
Note: Total segment revenue percentages greater than 100% due to intersegment revenue eliminations
The Broadcasting Group was reclassified as a discontinued operation and is not included in results
for 2009, 2010 and 2011
50 McGraw-Hill
Financial Review
Quarterly Results
2011 vs. 2010

1Q 2Q 3Q 4Q Full Year
% % % % %
(in millions, except earnings per share) 2011 2010 Change 2011 2010 Change 2011 2010 Change 2011 2010 Change 2011 2010 Change
Revenue
S&P Ratings $ 443 $ 401 10% $ 480 $ 405 19% $ 410 $ 417 (2%) $ 434 $ 472 (8%) $1,767 $1,695 4%
S&P Capital IQ/S&P Indices 324 279 16% 333 294 13% 349 294 19% 348 322 8% 1,354 1,189 14%
Commodities & Commercial 206 187 10% 222 199 12% 229 204 12% 239 221 8% 896 811 10%
McGraw-Hill Education 303 317 (4%) 537 565 (5%) 936 1,055 (11%) 516 496 4% 2,292 2,433 (6%)
Intersegment royalties (15) (13) 15% (15) (14) 7% (16) (14) 14% (17) (15) 13% (63) (56) 13%
Total revenue $1,261 $1,171 8% $1,557 $1,449 7% $1,908 $1,956 (2%) $1,520 $1,496 2% $6,246 $6,072 3%
Segment Expense
S&P Ratings $ 253 $ 212 19% $ 267 $ 224 19% $ 241 $ 230 5% $ 287 $ 267 7% $1,048 $ 933 12%
S&P Capital IQ/S&P Indices 228 208 10% 235 211 11% 237 208 14% 251 247 2% 951 874 9%
McGraw-Hill Education 378 379 0% 495 512 (3%) 621 698 (11%) 478 481 (1%) 1,972 2,070 (5%)
Intersegment royalties (15) (13) 15% (15) (14) 7% (16) (14) 14% (17) (15) 13% (63) (56) 13%
Total segment expense $1,011 $ 943 7% $1,155 $1,088 6% $1,261 $1,282 (2%) $1,197 $1,166 3% $4,624 $4,479 3%
Segment Operating Profit

S&P Ratings $ 190 $ 189 1% $ 213 $ 181 18% $ 169 $ 187 (10%) $ 147 $ 205 (28%) $ 719 $ 762 (6%)
S&P Capital IQ/S&P Indices 96 71 35% 98 83 18% 112 86 30% 97 75 29% 403 315 28%
McGraw-Hill Education (75) (62) (21%) 42 53 (21%) 315 357 (12%) 38 15 N/M 320 363 (12%)
Total segment operating profit $ 250 $ 228 10% $ 402 $ 361 11% $ 647 $ 674 (4%) $ 323 $ 330 (2%) $1,622 $1,593 2%
General corporate expense 34 35 (3%) 44 38 16% 41 44 (7%) 81 63 29% 200 180 11%
Earnings before interest
and taxes 216 193 12% 358 323 11% 606 630 (4%) 242 267 (9%) 1,422 1,413 1%
Interest (expense), net 19 22 (14%) 20 22 (9%) 18 19 (5%) 18 19 (5%) 75 82 (9%)
Income before taxes on income 197 171 15% 338 301 12% 588 611 (4%) 224 248 (10%) 1,347 1,331 1%
Provision for taxes on income 72 62 16% 122 109 12% 214 222 (4%) 81 90 (10%) 489 483 1%
Income from continuing
operations 125 109 15% 216 192 12% 374 389 (4%) 143 158 (9%) 858 848 1%
(Loss) income from discontinued
operations, net of tax (1) (2) (50%) – 2 N/M (1) 1 N/M 78 3 N/M 76 4 N/M
Net income 124 107 16% 216 194 11% 373 390 (4%) 221 161 37% 934 852 10%
Less: Net income attributable
to noncontrolling interests (4) (4) 5% (5) (3) 67% (7) (10) (30%) (7) (7) 0% (23) (24) (3%)
Net income attributable to
The McGraw-Hill Companies $ 120 $ 103 16% $ 211 $ 191 10% $ 366 $ 380 (4%) $ 214 $ 154 39% $ 911 $ 828 10%
Diluted weighted average

shares outstanding 309.6 316.3 (2%) 309.2 313.2 (1%) 303.6 309.3 (2%) 292.0 310.3 (6%) 303.6 312.3 (3%)
Diluted earnings per share:

Continuing operations $ 0.39 $ 0.34 15% $ 0.68 $ 0.60 13% $ 1.21 $ 1.23 (2%) $ 0.47 $ 0.49 (4%) $ 2.75 $ 2.64 4%
Discontinued operations $ – $ (0.01) N/M $ – $ 0.01 N/M $ – $ – – $ 0.26 $ 0.01 N/M $ 0.25 $ 0.01 N/M
Total diluted earnings
per share $ 0.39 $ 0.33 18% $ 0.68 $ 0.61 11% $ 1.21 $ 1.23 (2%) $ 0.73 $ 0.50 46% $ 3.00 $ 2.65 13%
Note: N/M indicates a non-meaningful or non-calculable variance
Details may not sum to total due to rounding

Operating Segment Trends
Revenue by Segment
S&P Ratings $ 1,767 $ 1,695 $ 1,537 $ 1,583 $ 2,138 $ 1,950 $ – $ – $ – $ – $ –
% increase/(decrease) 4% 10% (3%) (26%) 10% – – – – – –
% of total 28% 28% 26% 25% 32% 31% – – – – –
S&P Capital IQ/S&P Indices $ 1,354 $ 1,189 $ 1,122 $ 1,113 $ 942 $ 824 $ – $ – $ – $ – $ –
% increase/(decrease) 14% 6% 1% 18% 14% – – – – – –
% of total 22% 20% 19% 18% 14% 13% – – – – –
Combined S&P Ratings,
S&P Capital IQ/S&P Indices (1) $ – $ – $ – $ – $ – $ – $ 2,401 $ 2,055 $ 1,768 $ 1,555 $ 1,398
% increase/(decrease) – – – – – – 17% 16% 14% 11% 16%
% of total – – – – – – 40% 39% 36% 33% 31%
Commodities & Commercial (2) $ 896 $ 811 $ 873 $ 1,062 $ 1,020 $ 985 $ 931 $ 800 $ 773 $ 810 $ 846
% increase/(decrease) 10% (7%) (18%) 4% 4% 6% 16% 3% (5%) (4%) (16%)
% of total 14% 13% 15% 17% 15% 16% 16% 15% 16% 17% 19%
McGraw-Hill Education $ 2,292 $ 2,433 $ 2,387 $ 2,639 $ 2,706 $ 2,524 $ 2,672 $ 2,396 $ 2,349 $ 2,343 $ 2,290
% increase/(decrease) (6%) 2% (10%) (2%) 7% (6%) 12% 2% 0% 2% 12%
% of total 37% 40% 41% 42% 40% 40% 45% 46% 48% 50% 51%
Intersegment elimination $ (63) $ (56) $ (49) $ (42) $ (34) $ (28) $ – $ – $ – $ – $ –
Total revenue $ 6,246 $ 6,072 $ 5,870 $ 6,355 $ 6,772 $ 6,255 $ 6,004 $ 5,251 $ 4,890 $ 4,708 $ 4,534
% increase/(decrease) 3% 3% (8%) (6%) 8% 4% 14% 7% 4% 4% 7%
Expenses by Segment
S&P Ratings $ 1,048 $ 933 $ 825 $ 834 $ 979 $ 853 $ – $ – $ – $ – $ –
% increase/(decrease) 12% 13% (1%) (15%) 15% – – – – – –
S&P Capital IQ/S&P Indices $ 951 $ 874 $ 820 $ 792 $ 731 $ 713 $ – $ – $ – $ – $ –
% increase/(decrease) 9% 7% 4% 8% 3% – – – – – –
S&P Capital IQ/S&P Indices (1) $ – $ – $ – $ – $ – $ – $ 1,380 $ 1,215 $ 1,101 $ 995 $ 972
Commodities & Commercial (2) $ 716 $ 658 $ 777 $ 970 $ 956 $ 935 $ 870 $ 681 $ 663 $ 692 $ 781
% increase/(decrease) 9% (15%) (20%) 1% 2% 7% 28% 3% (4%) (11%) (2%)
McGraw-Hill Education $ 1,972 $ 2,070 $ 2,111 $ 2,317 $ 2,303 $ 2,192 $ 2,259 $ 2,054 $ 2,025 $ 2,008 $ 2,015
% increase/(decrease) (5%) (2%) (9%) 1% 5% (3%) 10% 1% 1% 0% 16%
Intersegment elimination $ (56) $ (56) $ (49) $ (42) $ (34) $ (28) $ – $ – $ – $ – $ –
Total expense $ 4,624 $ 4,479 $ 4,484 $ 4,871 $ 4,935 $ 4,665 $ 4,509 $ 3,950 $ 3,789 $ 3,695 $ 3,768
% increase/(decrease) 3% 0% (8%) (1%) 6% 3% 14% 4% 3% (2%) 13%
(1) Revenue for S&P Ratings and expenses for S&P Capital IQ/S&P Indices include an intersegment royalty charged to S&P Capital IQ/S&P Indices for the rights to use and distribute content and data
developed by S&P Ratings
(2) Commodities & Commercial includes the Broadcasting Group for 2008 and prior. The Broadcasting Group was reclassified as a discontinued operation and is not included in results for 2009, 2010 and 2011
52 McGraw-Hill
Financial Review
Operating Profit by Segment

S&P Ratings $ 719 $ 762 $ 712 $ 749 $ 1,159 $ 1,097 $ – $ – $ – $ – $ –
% increase/(decrease) (6%) 7% (5%) (35%) 6% – – – – – –
% of total 44% 48% 51% 50% 63% 69% – – – – –
S&P Capital IQ/S&P Indices $ 403 $ 315 $ 302 $ 321 $ 211 $ 111 $ – $ – $ – $ – $ –
% increase/(decrease) 28% 4% (6%) 52% 90% – – – – – –
% of total 25% 20% 22% 22% 11% 7% – – – – –
S&P Capital IQ/S&P Indices (1) $ – $ – $ – $ – $ – $ – $ 1,021 $ 840 $ 667 $ 560 $ 426
% of total – – – – – – 68% 65% 61% 55% 56%
Commodities & Commercial (2) $ 180 $ 153 $ 96 $ 92 $ 64 $ 50 $ 61 $ 119 $ 110 $ 118 $ 65
% increase/(decrease) 18% 59% 4% 44% 28% (18%) (49%) 8% (7%) 82% (69%)
% of total 11% 10% 7% 6% 3% 3% 4% 9% 10% 12% 8%
McGraw-Hill Education $ 320 $ 363 $ 276 $ 322 $ 403 $ 332 $ 413 $ 342 $ 324 $ 335 $ 275
% increase/(decrease) (12%) 32% (14%) (20%) 21% (20%) 21% 6% (3%) 22% (11%)
% of total 20% 23% 20% 22% 22% 21% 28% 26% 29% 33% 36%
Total operating profit $ 1,622 $ 1,593 $ 1,386 $ 1,484 $ 1,837 $ 1,590 $ 1,495 $ 1,301 $ 1,101 $ 1,013 $ 766
% increase/(decrease) 2% 15% (7%) (19%) 16% 6% 15% 18% 9% 32% (15%)
Operating Profit Margin by Segment
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
S&P Ratings 40.7% 45.0% 46.3% 47.3% 54.2% 56.3% – – – – –
S&P Capital IQ/S&P Indices 29.8% 26.5% 26.9% 28.8% 22.4% 13.5% – – – – –
Commodities & Commercial 20.1% 18.9% 11.0% 8.7% 6.3% 5.1% 6.6% 14.9% 14.2% 14.6% 7.7%
McGraw-Hill Education 14.0% 14.9% 11.6% 12.2% 14.9% 13.2% 15.5% 14.3% 13.8% 14.3% 12.0%
Total operating profit margin 26.0% 26.2% 23.6% 23.4% 27.1% 25.4% 24.9% 24.8% 22.5% 21.5% 16.9%

S&P Capital IQ/S&P Indices* 36.7% 38.1% 38.9% 40.3% 45.0% 44.0% 42.5% 40.9% 37.7% 36.0% 30.5%
* Adjusted for intersegment revenue elimination

Expanding Globally
Foreign Source Revenue by Segment
Since 2002, MHP’s year-over-year Domestic and Foreign Source Revenue Growth, 2001 – 2011 (1,2)
(dollars in billions)
revenue growth from abroad has
$7
outpaced domestic performance. Domestic 10-year CAGR: 1.3%
Foreign 10-year CAGR: 9.7%
In 2011, foreign sources accounted 5
for 32% of MHP’s total revenue 4

versus 18% in 2001 2
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Domestic $3.7 $3.8 $3.9 $4.1 $4.7 $4.7 $5.0 $4.6 $4.1 $4.3 $4.2
Foreign 0.8 0.9 1.0 1.1 1.3 1.5 1.8 1.8 1.7 1.8 2.0
Total $4.5 $4.7 $4.9 $5.3 $6.0 $6.3 $6.8 $6.4 $5.9 $6.1 $6.2
Total Company (1, 2) Standard & Poor’s Ratings Services (1, 2) S&P Capital IQ/S&P Indices (1, 2)
(dollars in millions) (dollars in millions) (percent of total foreign source revenue) (dollars in millions) (percent of total foreign source revenue)
$2,500 $1,000 $500

49% 43%
21%
44% 43%
43% 20%
1,875 750 375 19%
17%
14%
1,250 500 250
625 250 125
‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11
1,764 1,776 1,726 1,800 1,998 863 775 738 776 857 243 307 324 360 413
Commodities & Commercial Markets (1) McGraw-Hill Education (1)

(dollars in millions) (percent of total foreign source revenue) (dollars in millions) (percent of total foreign source revenue)
$400 $500 25%

17% 25%
24% 23% 21%
300 16% 16% 375

15%
13%
200 250
100 125
‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11
237 264 276 280 346 439 453 412 415 417
(1) Foreign source revenue includes international sales by U.S. operations

(2) Does not include adjustment for intersegment revenue elimination
54 McGraw-Hill
Financial Review
Geographic Region and Percent of Total Foreign Source Revenue (1) More than 30% of 2011
(dollars in millions)
international revenue
$2,000
came from emerging
markets
1,500
1,000
5-year CAGR for
Foreign Source
500 Revenue
EMEA 4.5%
‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Asia 8.2%
EMEA $ 884 58% $1,031 58% $1,021 57% $ 964 56% $ 987 55% $1,101 55%
Asia 376 25% 426 24% 439 25% 468 27% 499 28% 557 28% Canada 5.7%
Canada 156 10% 176 10% 181 10% 181 10% 189 10% 205 10% Latin America 3.3%
Latin America 114 7% 131 7% 135 8% 113 7% 126 7% 134 7%
Total $1,530 100% $1,764 100% $1,776 100% $1,726 100% $1,800 100% $1,998 100% Total 5.5%
Domestic and Foreign Source Revenue by Segment

% of
2011 10-year
(dollars in millions) 2011 total 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 CAGR
Revenue
Domestic $ 4,248 68% $ 4,272 $ 4,144 $ 4,579 $ 5,009 $ 4,725 $ 4,666 $ 4,120 $ 3,925 $ 3,848 $ 3,739 1.3%
Foreign (1) 1,998 32% 1,800 1,726 1,776 1,764 1,530 1,338 1,130 965 860 795 9.7%
Total $ 6,246 100% $ 6,072 $ 5,870 $ 6,355 $ 6,772 $ 6,255 $ 6,004 $ 5,251 $ 4,890 $ 4,708 $ 4,534 3.3%
Revenue by Segment
Domestic
S&P Ratings $ 916 22% $ 924 $ 800 $ 808 $ 1,275 $ 1,214 $ – $ – $ – $ – $ –
S&P Capital IQ/
S&P Indices 943 22% 831 798 806 700 608 – – – – –
S&P Capital IQ/
S&P Indices – – – – – – – 1,630 1,413 1,259 1,126 1,014
Commodities
& Commercial 551 13% 531 596 798 783 787 749 666 645 682 721
McGraw-Hill Education 1,875 44% 2,019 1,976 2,186 2,267 2,131 2,287 2,041 2,021 2,040 2,004
Intersegment elimination (36) (1%) (34) (25) (19) (16) (14) – – – – –
Total $ 4,248 100% $ 4,272 $ 4,144 $ 4,579 $ 5,009 $ 4,725 $ 4,666 $ 4,120 $ 3,925 $ 3,848 $ 3,739
Foreign(1)
S&P Ratings $ 857 43% $ 776 $ 738 $ 775 $ 863 $ 736 $ – $ – $ – $ – $ –
S&P Capital IQ/
S&P Indices 413 21% 360 324 307 243 217 – – – – –
S&P Capital IQ/
S&P Indices – – – – – – – 771 642 510 430 384
Commodities
& Commercial 346 17% 280 276 264 237 197 182 134 128 128 125
McGraw-Hill Education 417 21% 415 412 453 439 393 385 355 327 303 286
Intersegment elimination (35) (2%) (30) (24) (23) (18) (14) – – – – –
Total $ 1,998 100% $ 1,800 $ 1,726 $ 1,776 $ 1,764 $ 1,530 $ 1,338 $ 1,130 $ 965 $ 860 $ 795
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Number of Employees
Domestic 11,592 11,410 11,336 11,986 12,565 12,860 13,486 13,122 12,736 13,180 13,566
Foreign 11,068 9,345 9,741 9,663 8,606 7,354 6,114 4,131 3,332 3,325 3,569
Total 22,660 20,755 21,077 21,649 21,171 20,214 19,600 17,253 16,068 16,505 17,135
(1) Foreign source revenue includes international sales by U.S. operations 2012 Investor Fact Book 55
Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA)
Total Company EBITDA Standard & Poor’s Ratings Services S&P Capital IQ/S&P Indices
(dollars in millions) (dollars in millions) (dollars in millions)
$2,000 $1,200 $500
1,500 900 375
1,000 600 250
500 300 125
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11
843 1,044 1,255 1,302 1,521 1,588 1,838 1,553 1,415 1,554 1,578 1,159 749 712 762 719 211 321 302 315 403
Commodities & Commercial Markets McGraw-Hill Education

(dollars in millions) (dollars in millions)
$200 $500
150 375
100 250
50 125
‘07 ‘08 ‘09 ‘10 ‘11 ‘07 ‘08 ‘09 ‘10 ‘11
64 92 96 153 180 403 322 276 363 320
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Segment operating profit
S&P Ratings $ 719 $ 762 $ 712 $ 749 $ 1,159 $ 1,097 $ – $ – $ – $ – $ –
S&P Capital IQ/S&P Indices 403 315 302 321 211 111 – – – – –
S&P Capital IQ/S&P Indices – – – – – – 1,021 840 667 560 426
Commodities & Commercial 180 153 96 92 64 50 61 119 110 118 65
McGraw-Hill Education 320 363 276 322 403 332 413 342 324 335 275
Total segment operating profit $ 1,622 $ 1,593 $ 1,386 $ 1,484 $ 1,837 $ 1,590 $ 1,495 $ 1,301 $ 1,101 $ 1,013 $ 766
Less: Corporate expense (income) 200 180 127 109 160 163 125 124 (38) 92 93
Earnings before interest and taxes (EBIT) 1,422 1,413 1,259 1,375 1,677 1,427 1,370 1,177 1,139 921 673
Depreciation 98 98 106 120 113 113 107 92 83 87 86
Amortization of intangibles 58 43 50 58 48 48 44 33 33 36 84
EBITDA $ 1,578 $ 1,554 $ 1,415 $ 1,553 $ 1,838 $ 1,588 $ 1,521 $ 1,302 $ 1,255 $ 1,044 $ 843
56 McGraw-Hill
Financial Review
Capital Investments
Investments, Depreciation and Amortization by Segment
(dollars in millions) 2011 2010 2009 (dollars in millions) 2011 2010 2009
Capital Expenditures Depreciation
S&P Ratings $ 41 $ 35 $ 30 S&P Ratings $ 25 $ 22 $ 23
S&P Capital IQ/S&P Indices 9 15 14 S&P Capital IQ/S&P Indices 9 12 13
Commodities & Commercial 13 6 4 Commodities & Commercial 8 7 9
McGraw-Hill Education 47 40 37 McGraw-Hill Education 51 50 54
Corporate 8 14 3 Corporate 5 6 6
Total $ 118 $ 110 $ 88 Total $ 98 $ 97 $ 105
Investment in Prepublication Costs Amortization of Intangibles
McGraw-Hill Education $ (158) $ (151) $ (177) S&P Ratings $ 2 $ 1 $ 9
Total $ (158) $ (151) $ (177) S&P Capital IQ/S&P Indices 21 10 9
Amortization of Prepublication Costs Commodities & Commercial 10 10 8
McGraw-Hill Education $ 198 $ 246 $ 270 McGraw-Hill Education 25 22 24
Total $ 198 $ 246 $ 270 Total $ 58 $ 43 $ 50

Acquisitions and Divestitures
Acquisition and divestiture Acquisitions Divestitures

amounts reflect those
2011 $200 million $238 million
reported on McGraw-Hill’s ● RAM Holdings Berhad (5% interest) ★DPC Data
U.S. GAAP cash flow ● TRIS Corporation Limited (5% interest) ▲ LinkedIn Corporation (0.45% interest)
statement and are not ▲ BENTEK Energy LLC ▲ JDPA Estimate
▲ Steel Business Briefing Group ▲ McGraw-Hill Broadcasting
indicative of actual purchase/
■ Bookette Software Company ■ Ebrary (2.4% interest)
sale prices due to purchase ■ Inkling (2% interest)
price adjustments and ■ Unigo (5.5% interest)
other timing differences 2010 $364 million $31 million
in payments/receipts. ● Pipal Research Corporation ● CRISIL National Commodity &
★ Thomson Reuters databases Derivatives Exchange Ltd.
Divestiture amounts also (7% of 12% interest)
(contingent payment)
include proceeds received ★ TheMarkets.com LLC ● CRISIL Gas Strategies
(remaining 10% interest)
from the disposition of ■ Ambow Education Holding Ltd.
★ Return on investment in
(1% interest)
property and equipment. ■ Starting Out!™
The Markets.com LLC
■ Australian secondary
■ Tegrity Ltd. education business
2009 No acquisitions $15 million

★ Vista Research, Inc.
▲ BusinessWeek
2008 $48 million $0.4 million

● Maalot, Ltd. ● CRISIL Gas Strategies
★ Case-Shiller® Home Price Indices (90% interest)
(licensing agreement)
★ Thomson Reuters databases
▲ Umbria, Inc.
▲ LinkedIn Corporation (0.45% interest)

★ ClariFI, Inc. ★ S&P mutual fund data business
★ IMAKE/ABSX ■ Benziger
■ HotChalk, Inc. (6% interest)
■ Reading Success (reading program)

★ Heale Financial ★ The Review of Securities Regulation
★ TheMarkets.com LLC (6% interest after newsletters
acquisition of additional 3% interest) ▲ E-Source
▲ Automotive Resources Asia, Ltd. ▲ POWER Magazine
▲ Azteca America affiliate low-powered TV
station in Bakersfield, CA
Operating Segment Legend:

● Standard & Poor’s Ratings Services (formerly named “Standard & Poor’s” in 2010 and “Financial Services” from 2001 to 2009)
★ S&P Capital IQ/S&P Indices (formerly named “McGraw-Hill Financial” in 2010 and “Financial Services” from 2001 to 2009)
▲ Commodities & Commercial Markets (formerly named “Information & Media” from 2001 to 2010)
■ McGraw-Hill Education
◆ Corporate
58 McGraw-Hill
Financial Review
Acquisitions Divestitures
● CRISIL Limited (59% interest after ★ Corporate Value Consulting
acquisition of additional 49% interest) ★ Standard & Poor’s Securities, Inc.
● Taiwan Ratings Corporation (51% interest ▲ Healthcare Information Group
after acquisition of additional 1% interest)
★ ASSIRT Pty Limited
★ TheMarkets.com (3% interest)
★ Vista Research, Inc.
▲ Azteca America affiliate low-powered TV
stations in Colorado and San Diego
▲ J.D. Power and Associates
▲ USDTV
■ TurnLeaf Solutions

★ Capital IQ, Inc. ★ J.J. Kenny Drake, Inc.
▲ Center for Business Intelligence (energy ■ Landoll, Frank Schaffer and related
conference business only) juvenile retail publishing businesses
■ Grow.net, Inc.
■ PRCEDU Corporation (9% interest)

▲ FriedWire, Inc. ★ S&P ComStock
◆ Rock-McGraw, Inc. (45% interest)

● EA Ratings ★ MMS International
■ Bredex Corporation ▲ CAP
■ Clear Learning ■ Lifetime Learning
■ Open University Press
■ Reality Based Learning

● Charter Research Corporation ★ Data Resources Inc.
★ Corporate Value Consulting ★ Rational Investors
▲ BizNet TV, Inc.
▲ Financial Times Energy
■ Frank Schaffer Publications
■ Mayfield Publishing Company
■ Uniscore, Inc.
■ Visual Education Corporation

Advancing Total Shareholder Value
The McGraw-Hill Companies has paid a dividend each year Dividends per Share of Common Stock, 2001 – 2011
since 1937 and is one of fewer than 25 companies in the
S&P 500 that has increased its dividend annually for the last $1.00
39 years. The annualized rate of $1.02 per share of common 0.75

stock includes a 2.0% increase approved by the Board in
January 2012. Reflecting the weighted impact of share 0.50
repurchases in 2011, fully-diluted shares at the end of the 0.25

fourth quarter of 2011 were approximately 283 million. ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
0.490 0.510 0.540 0.600 0.660 0.726 0.820 0.880 0.900 0.940 1.000
Notes: Represents annualized dividend rate per share
Adjusted for all stock splits
Share Repurchase Programs (1) Dividend Payout

(as a percentage of current year’s earnings)
Diluted Weighted 60%
Shares Average Shares
Year $ in millions Purchased Outstanding
2011 $1,500 34,742,871 303,645,607 45
2010 256 8,710,445 312,220,085
2009 – – 313,296,491 30
2008 447 10,900,000 318,687,254
2007 2,213 37,000,000 344,784,866 15
2006 1,540 28,400,000 366,877,769
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
2005 672 14,343,900 382,569,750 51 35 30 31 30 30 28 35 39 35 32
2004 401 10,000,000 385,823,700
2003 213 6,935,400 384,009,014 Stock Split History, 1953 – 2005
2002 196 6,409,200 389,146,638 Record Date Payment Date Distribution
2001 182 6,203,400 391,745,196 May 6, 2005 May 17, 2005 2-for-1
2000 168 6,235,200 392,143,250 February 24, 1999 March 8, 1999 2-for-1
1999 174 6,463,400 397,114,618 March 28, 1996 April 26, 1996 2-for-1
1998 106 5,348,000 398,208,132 May 9, 1983 June 1, 1983 2-for-1
1997 80 5,200,400 399,008,728
June 30, 1967 July 17, 1967 2-for-1
1996 63 5,451,600 399,483,608 March 10, 1961 March 17, 1961 3-for-1
1987 135 19,960,000 July 25, 1956 August 8, 1956 3-for-1
(1) Adjusted for all stock splits July 24, 1953 August 3, 1953 2-for-1
Note: Shares repurchased are reported on a trade-date basis
MHP Debt Profile

Summary of Debt Outstanding (as of December 31, 2011) MHP Debt Ratings (as of August 2012)
(dollars in millions) Moody’s Fitch

5.375% Senior notes, due 2012 $ 400 Long-term debt A3 A-
5.900% Senior notes, due 2017 399 Commercial paper P2 F2
6.550% Senior notes, due 2037 399 Outlook Negative Stable
Total debt $ 1,198
Cash and equivalents & short-term investments $ 973
Net debt $ 225
60 McGraw-Hill
Financial Review
Quarterly Stock Valuation Data
Year Quarter Prices(1) MHP MHP – Price to Earnings(2) S&P 500 – Price to Earnings(2) P/E Relative to S&P 500
High Low Close Volume High Low Close High Low Close High Low Close
2011 4 45.770 38.680 44.970 123,076,293 15.57 13.16 15.30 13.40 11.14 13.04 1.16 1.18 1.17
3 46.990 34.950 41.000 200,399,637 16.55 12.31 14.44 14.33 11.64 11.96 1.15 1.06 1.21
2 43.500 38.090 41.910 111,965,523 15.43 13.51 14.86 15.08 13.84 14.53 1.02 0.98 1.02
1 40.560 36.200 39.400 103,302,467 14.70 13.12 14.28 15.46 14.37 15.25 0.95 0.91 0.94
2010 4 39.450 32.700 36.410 131,104,512 14.56 12.07 13.44 15.07 13.51 15.01 0.97 0.89 0.89
3 33.800 27.080 33.060 118,300,814 12.71 10.18 12.43 14.65 12.79 14.44 0.87 0.80 0.86
2 36.940 26.950 28.140 221,307,328 14.60 10.65 11.12 16.64 14.04 14.07 0.88 0.76 0.79
1 36.670 32.680 35.650 103,543,330 14.67 13.07 14.26 17.85 15.79 17.68 0.82 0.83 0.81
2009 4 35.240 24.460 33.510 194,468,691 14.87 10.32 14.14 19.88 17.94 19.61 0.75 0.58 0.72
3 34.100 23.550 25.140 243,943,008 14.89 10.28 10.98 27.27 21.95 26.69 0.55 0.47 0.41
2 34.090 22.460 30.110 177,245,398 13.64 8.98 12.04 24.03 19.69 23.10 0.57 0.46 0.52
1 25.890 17.220 22.870 245,097,570 9.84 6.55 8.70 21.95 15.51 18.56 0.45 0.42 0.47
2008 4 33.120 17.150 23.190 200,117,215 12.36 6.40 8.65 18.56 16.48 18.24 0.67 0.39 0.47
3 47.130 22.000 31.610 153,573,747 17.01 7.94 11.41 20.26 17.07 17.99 0.84 0.47 0.63
2 45.610 36.170 40.120 163,545,961 16.00 12.69 14.08 20.65 18.24 18.35 0.77 0.70 0.77
1 44.760 33.910 36.950 184,588,816 15.22 11.53 12.57 19.17 16.37 17.23 0.79 0.70 0.73
2007 4 55.140 43.460 43.810 178,192,844 18.08 14.25 14.36 19.09 17.04 17.79 0.95 0.84 0.81
3 68.810 47.150 50.910 247,126,617 21.98 15.06 16.27 17.42 15.35 17.09 1.26 0.98 0.95
2 72.500 60.160 68.080 123,650,344 24.83 20.60 23.32 16.83 15.47 16.42 1.48 1.33 1.42
1 69.980 61.060 62.880 124,541,820 25.63 23.37 23.03 16.36 15.26 15.90 1.57 1.53 1.45
2006 4 69.250 57.280 68.020 76,636,900 26.95 22.29 26.47 16.32 15.13 16.17 1.65 1.47 1.64
3 58.300 48.400 58.030 92,639,400 22.95 19.06 22.85 15.60 14.25 15.55 1.47 1.34 1.47
2 58.750 47.800 50.230 121,441,400 23.98 19.51 20.50 16.23 14.92 15.54 1.48 1.31 1.32
1 59.570 46.370 57.620 119,198,700 25.35 19.73 24.52 16.55 15.73 16.35 1.53 1.25 1.50
2005 4 53.970 45.600 51.630 78,045,900 23.26 19.66 22.25 16.69 15.28 16.33 1.39 1.29 1.36
3 48.750 43.010 48.040 66,287,000 21.86 19.29 21.54 16.79 15.95 16.56 1.30 1.21 1.30
2 45.675 40.510 44.250 111,714,000 21.91 19.43 21.22 16.88 15.73 16.49 1.30 1.24 1.29
1 47.995 42.810 43.625 106,768,000 24.00 21.41 21.81 17.61 16.67 16.91 1.36 1.28 1.29
2004 4 46.055 39.425 45.770 83,969,000 23.74 20.32 23.59 17.94 16.11 17.91 1.32 1.26 1.32
3 39.885 36.415 39.845 74,212,200 21.50 19.63 21.48 17.66 16.44 17.25 1.22 1.19 1.25
2 40.670 37.825 38.285 85,443,000 23.11 21.49 21.75 18.52 17.32 18.36 1.25 1.24 1.18
1 40.185 34.550 38.070 97,652,000 23.64 20.32 22.39 19.95 18.98 19.39 1.18 1.07 1.15
2003 4 35.000 30.995 34.960 84,799,800 21.21 18.78 21.19 20.34 18.21 20.33 1.04 1.03 1.04
3 32.255 29.300 31.065 97,932,400 20.35 18.49 19.60 20.10 18.57 19.25 1.01 1.00 1.02
2 33.075 27.730 31.000 124,260,600 21.62 18.12 20.26 20.74 17.32 19.91 1.04 1.05 1.02
1 31.290 25.870 27.795 131,153,800 20.79 17.19 18.47 19.62 16.55 17.79 1.06 1.04 1.04
2002 4 33.150 27.755 30.220 120,239,200 22.25 18.63 20.28 20.73 16.70 19.11 1.07 1.12 1.06
3 32.990 25.355 30.610 87,467,400 23.15 17.79 21.48 22.58 17.62 18.52 1.03 1.01 1.16
2 34.365 28.150 29.850 78,497,800 25.74 21.09 22.36 27.60 22.92 23.80 0.93 0.92 0.94
1 34.850 29.440 34.125 78,760,600 27.23 23.00 26.66 30.20 27.57 29.44 0.90 0.83 0.91
2001 4 30.900 24.350 30.490 110,203,800 24.92 19.64 24.59 30.21 26.43 29.55 0.82 0.74 0.83
3 33.975 25.275 29.100 77,876,200 27.51 20.47 23.56 29.50 22.48 24.77 0.93 0.91 0.95
2 35.435 28.920 33.075 76,444,200 30.29 24.72 28.27 27.98 23.22 26.03 1.08 1.06 1.09
1 32.370 27.045 29.825 82,145,400 28.27 23.62 26.05 26.16 20.44 21.94 1.08 1.16 1.19
(1) Data adjusted for all stock splits

(2) Based on 12-month moving operating earnings per share, which excludes one-time items
Source: S&P Capital IQ

Items Affecting Comparability of Results
Summary of items affecting comparability 2008 Income from operations before taxes includes a
of results $73 million restructuring charge, which is reflected in operating
income as follows:
2011 Revenue and operating income for the Broadcasting
Group, historically included in the Commodities & Commercial (dollars in millions) Q1 Q2 Q3 Q4 FY
segment, was restated as discontinued operations
S&P Ratings $– $ 14 $ 2 $ 6 $ 22
• Discontinued operations in 2011 includes a $74 million gain (net
S&P Capital IQ/S&P Indices – 1 2 1 4
of taxes of $48 million) from the sale of the Broadcasting Group
Commodities & Commercial – – 14 5 19
Income from operations before taxes includes:
McGraw-Hill Education – 9 5 11 25
• Q4—Growth and Value Plan costs of $10 million at Corporate Corporate – – – 3 3
and a $66 million restructuring charge, which is reflected in
Total pre-tax charges $– $ 24 $ 23 $ 26 $ 73
operating income as follows: a $9 million charge at the
Standard & Poor’s Ratings Services segment, a $6 million
charge at the Commodities & Commercial Markets segment, 2007 Income from operations before taxes includes:
a $34 million charge at the McGraw-Hill Education segment, • a $44 million restructuring charge
and a $17 million charge at Corporate
• a $17 million gain on the sale of the Company’s mutual fund
data business
2010 Income from operations before taxes includes:
• Q4—an $11 million restructuring charge at the Commodities & 2006 Revenue and operating profit for the Commodities &
Commercial Markets segment and a $16 million charge for Commercial Markets segment includes deferrals of $24 million
subleasing excess space at the Company’s New York facilities and $21 million, respectively, due to the transformation of
• Q3—a $7 million gain on the sale of certain equity interests at Sweets from a primarily print product catalog to a bundled print
the Standard & Poor’s Ratings Services segment and a $4 and online service
million gain on the sale of McGraw-Hill Education’s Australian Income from operations before taxes includes:
secondary education business
• a $32 million restructuring charge
2009 Income from operations before taxes includes: • a $136 million charge for stock compensation as a result
of a new accounting standard for share-based payments
• Q4—an $11 million gain on the sale of BusinessWeek at the
(included in this expense is a one-time pre-tax charge of
Commodities & Commercial Markets segment
$24 million for the elimination of the Company’s restoration
• Q2—a $14 million loss on the sale of Vista Research, Inc. at stock option program)
the S&P Capital IQ/S&P Indices segment and a $15 million
restructuring charge, which is reflected in operating income as
follows: a $4 million benefit at the Standard & Poor’s Ratings
Services segment, a $3 million charge at the S&P Capital IQ/
S&P Indices segment, a $4 million charge at the Commodities
& Commercial Markets segment, and a $12 million charge at
the McGraw-Hill Education segment
62 McGraw-Hill
Financial Review
2005 Income from operations before taxes includes: 2002 Income from operations before taxes includes a
$15 million loss on the disposition of MMS International at
• a $7 million gain on the sale of the Corporate Value Consulting
the S&P Capital IQ/S&P Indices segment
business at the S&P Capital IQ/S&P Indices segment
• a $6 million loss on the sale of the Healthcare Information 2001 Income from operations before taxes includes:
Group at the Commodities & Commercial Markets segment
• a $9 million gain on the sale of DRI at the S&P Capital IQ/S&P
• a $23 million restructuring charge Indices segment
Net income reflects a $10 million increase in income taxes on • a $23 million charge for the write-down of certain assets, the
the repatriation of funds shutdown of Blue List, and the contribution of Rational
Investors
2004 Net income reflects a non-cash benefit of $20 million as
• a $159 million charge for restructuring and asset write-downs
a result of the Company’s completion of various federal, state
and local, and foreign tax audit cycles • a $7 million gain on the sale of real estate
2003 Revenue and operating profit of S&P ComStock and the

juvenile retail publishing business historically included in the
S&P Capital IQ/S&P Indices and McGraw-Hill Education
segments, respectively, were restated as discontinued
operations, as follows:
• Discontinued operations in 2004 reflect the net after-tax loss
from the operations of the juvenile retail publishing business in
January of 2004 before the sale of the business
• Discontinued operations in 2003 include $88 million on the
divestiture of S&P ComStock and an $81 million loss on the
planned disposition of the juvenile retail publishing business,
which was subsequently sold on January 30, 2004
• Discontinued operations in years 2002 and 2001 reflect net
after-tax earnings (loss) from the operations of S&P ComStock
and the juvenile retail publishing business
Corporate expense includes a $131 million pre-tax gain on the

sale of real estate
Operating Segment Legend:

Standard & Poor’s Ratings Services (formerly named “Standard & Poor’s” in 2010 and “Financial Services” from 2001 to 2009)
S&P Capital IQ/S&P Indices (formerly named “McGraw-Hill Financial” in 2010 and “Financial Services” from 2001 to 2009)
Commodities & Commercial Markets (formerly named “Information & Media” from 2001 to 2010)

Notes
64 McGraw-Hill
“Safe Harbor” Statement Under the These risks and uncertainties include, • the level of funding in the education
Private Securities Litigation Reform among others: market;
Act of 1995 • School Education Group’s level of suc-
• worldwide economic, financial, political
and regulatory conditions; cess in adoptions and open territories;
This document contains forward-looking
statements, including without limitation • currency and foreign exchange volatility; • enrollment and demographic trends;
statements relating to our businesses • the effect of competitive products and • the strength of School Education
and our prospects, new products, sales, pricing; Group’s testing market, Higher Educa-
expenses, tax rates, cash flows, pre- tion, Professional and International’s
• the level of success of new product
publication investments and operating publishing markets and the impact of
development and global expansion;
and capital requirements that are made technology on them;
pursuant to the safe harbor provisions of • the level of future cash flows;
• continued investment by the construc-
the Private Securities Litigation Reform • the levels of capital and prepublication tion, automotive, computer and avia-
Act of 1995. These forward-looking state- investments; tion industries;
ments are intended to provide manage-
• income tax rates; • the strength and performance of the
ment’s current expectations or plans for
• restructuring charges; domestic and international automotive
our future operating and financial perfor-
markets;
mance and are based on assumptions • the health of debt and equity markets,
management believes are reasonable at including credit quality and spreads, • the volatility of the energy marketplace;
the time they are made. the level of liquidity and future debt • and the contract value of public works,
issuances; manufacturing and single-family unit
Forward-looking statements can be
• the level of interest rates and the construction.
identified by the use of words such as
“believe,” “expect,” “plan,” “estimate,” strength of the capital markets in the
In addition, there are certain risks and
“project,” “target,” “anticipate,” “intend,” U.S. and abroad;
uncertainties relating to our previously
“may,” “will,” “continue” and other • the demand and market for debt announced Growth and Value Plan which
words of similar meaning in connection ratings, including collateralized debt contemplates a separation of our educa-
with a discussion of future operating or obligations, residential and commercial tion business, including, but not limited
financial performance. These state- mortgage and asset-backed securities to, the impact and possible disruption to
ments are not guarantees of future and related asset classes; our operations, the timing and certainty
performance and involve certain risks, • the state of the credit markets and of completing the transaction, unantici-
uncertainties and assumptions that are their impact on Standard & Poor’s pated developments that may delay or
difficult to predict; therefore, actual out- Ratings and the economy in general; negatively impact the spin-off, and the
comes and results could differ materially ability of each business to operate as an
• the regulatory environment affecting
from what is expected or forecasted. independent entity upon completion of
Standard & Poor’s Ratings and our
the spin-off. We caution readers not to
other businesses;
place undue reliance on forward-looking
• the level of merger and acquisition statements.
activity in the U.S. and abroad;
www.alexanderdesign.com
The McGraw-Hill Companies

1221 Avenue of the Americas
New York, NY 10020-1095
investor_relations@mcgraw-hill.com
www.mcgraw-hill.com/investor_relations
August 2012
Design by Alexander Design Associates Inc.
Robert P. Merritt
Vice President,
Investor Relations
chip_merritt@mcgraw-hill.com
Tel: 212.512.4321
Fax: 212.512.3840
Celeste M. Hughes
Senior Manager, Communications
and Shareholder Relations
Tel: 212.512.2192
McGraw-Hill
Investor Relations
1221 Avenue of the Americas
New York, NY 10020-1095
Tel 212 512 4321
Fax 212 512 3840
investor_relations@mcgraw-hill.com
www.mcgraw-hill.com/investor_relations

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McGraw-Hill

To honor Don’s legacy as a reporter and his outstanding contribution to

Growth and Value Plan

McGraw-Hill Financial McGraw-Hill Education

Eleven-Year Financial Review

54 – 55 Expanding Globally: Foreign Source 62 – 63 Items Affecting Comparability of Results

Ticker Symbol NYSE: MHP 2012 Investor Fact Book 1

McGraw-Hill McGraw-Hill The separation is

A leader in content and A leading provider Advancing the

McGraw-Hill Financial McGraw-Hill Education

2012 Investor Fact Book 3

A Foundation for Growth

McGraw-Hill Financial is creating a scalable business with a strong

Built foundation for Clear operating Scalable operating

$4 Billion Pro-forma 2011 Revenue

McGraw-Hill Financial Global Serves Capitalizes

McGraw-Hill Financial A leading provider of content and analytics, delivering integrated

McGraw-Hill Financial will accelerate growth by Recurring Revenue:

(a) Revenue primarily related to annual fees for frequent

2012 Investor Fact Book 5

Expanding World of Standard & Poor’s Ratings Services

Standard & Poor’s

CreditMatters Mobile CreditMatters eReports CreditMatters Multimedia

www.standardandpoors.com/mobile http://www.standardandpoors.com/ereports http://video.standardandpoors.com/

2012 Investor Fact Book 7

Global Debt Markets

U.S. and European Corporate Debt U.S. Debt Market

U.S. and Europe: Corporate Debt Maturing $3,500

(dollars in billions) 2012* 2013 2014 2015 2016

Corporates (c) Commercial Mortgage-Backed Securities (CMBS) (b)

Municipals (a) Asset-Backed Securities (ABS) (b,e)

Notes for debt issuance:

Global Debt Markets (continued)

European Region Debt Market

The rated debt market is a component of the total 375

(annual figures; dollar volume in billions; data by domicile of issuer/assets)

1,875 82% 300

European Commercial Mortgage-Backed Securities (CMBS) (a,e)

Asia-Pacific Region Debt Market

European Collateralized Debt Obligations (CDOs) (a,e) Asian Corporates (b)

120 225 87%

European Covered Bonds (CB) (a,e) Asian Structured Finance (a,c,d)

Notes for debt issuance:

2012 Investor Fact Book 11

Standard & Poor’s Ratings Services continues to diversify Ratings

Financial Strength Ratings(1) Counterparty Ratings(2) Corporate Credit Ratings(3)

1,875 240 240

1,250 160 160

Evaluations Sovereign Ratings

Rating Evaluation Service Servicer Evaluations Sovereign Ratings

300 375 120

A Scalable Business with Unique, Integrated Offerings for

New Horizontal Capabilities

Data Analysis and Portfolio Analytics Across All Asset Classes

Creating One integrated data

S&P Capital IQ is developing smarter tools for Customers

2012 Investor Fact Book 13

Integrating New Capabilities into

Over-the-Counter Real-Time Exchange Portfolio and Risk

Providing Solutions—From Pre-Trade Ideas to Post-Trade Activities

Enterprise Solutions Content Modules

2012 Investor Fact Book 15

Client End-Users Investment Private Investment Wealth Commercial