Annual Reports

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  • 10-K (Mar 20, 2013)
  • 10-K (Feb 28, 2013)
  • 10-K (Feb 7, 2012)
  • 10-K (Feb 23, 2011)
  • 10-K (Feb 24, 2010)

 
Quarterly Reports

 
8-K

 
Other

MCGRAW HILL FINANCIAL INC 10-K 2007
FORM 10-K
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
     
(Mark One)    
þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
or
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 1-1023
THE MCGRAW-HILL COMPANIES, INC.
 
(Exact name of registrant as specified in its charter)
     
New York   13-1026995
     
State or other jurisdiction of   (I.R.S. Employer
incorporation or organization   (Identification No.)
     
1221 AVENUE OF THE AMERICAS, NEW YORK, N.Y.   10020
 
(Address of principal executive offices)   (Zip Code)
     
Registrant’s telephone number, including area code (212) 512-2000
Securities registered pursuant to Section 12(b) of the Act:
     
Title of each class   Name of each exchange on which registered
     
Common Stock — $1 par value   New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
NONE
(Title of class)

 
(Title of class)
     Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes o No
     Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þNo
     Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No
     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
     Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12-b-2 of the Exchange Act. (Check one):
þ Large accelerated filer       o Accelerated filer       o Non-accelerated filer
     Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12-b-2 of the Act). o Yes þ No
     The aggregate market value of voting stock held by non-affiliates of the Registrant as of the last business day of the second fiscal quarter ended June 30, 2006, was $17,671,080,161, based on the closing price of the common stock as reported on the New York Stock Exchange of $50.23 per common share. For purposes of this calculation, it is assumed that directors, executive officers and beneficial owners of more than 10% of the registrant outstanding stock are affiliates.
     The number of shares of common stock of the Registrant outstanding as of February 15, 2007 was 354,936,282 shares.
     Part I, Part II and Part III incorporate information by reference from the Annual Report to Shareholders for the year ended December 31, 2006. Part III incorporates information by reference from the definitive proxy statement mailed to shareholders March 19, 2007 for the annual meeting of shareholders to be held on April 25, 2007.
 
 

 


 

TABLE OF CONTENTS
                 
Item   Page        
PART I
    1          
    2          
    5          
    6          
    8          
    8          
    9          
 
               
PART II

 
               
    10          
    11          
    11          
    11          
    11          
    11          
    11          
    12          
 
               
PART III
 
               
    13          
    13          
    13          
    14          
    14          
 
               
PART IV
 
               
    14          
    16          
    Supplementary Schedule
    17          
    18          
    Exhibit Index and Exhibits
    21          
 EX-10.4: 1987 KEY EMPLOYEE STOCK INCENTIVE PLAN
 EX-10.5: AMENDED AND RESTATED 1993 EMPLOYEE STOCK INCENTIVE PLAN
 EX-10.6: AMENDED AND RESTATED 2002 STOCK INCENTIVE PLAN
 EX-10.10: KEY EXECUTIVE SHORT TERM INCENTIVE COMPENSATION PLAN
 EX-10.15: SENIOR EXECUTIVE SEVERANCE PLAN
 EX-10.28: AMENDMENT TO EMPLOYEE RETIREMENT PLAN SUPPLEMENTS
 EX-12: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 EX-13: ANNUAL REPORT
 EX-21: SUBSIDIARIES
 EX-23: CONSENT OF ERNST & YOUNG LLP
 EX-31.1: CERTIFICATION
 EX-31.2: CERTIFICATION
 EX-32: CERTIFICATION

 


Table of Contents

PART I
Item 1. Business
    The McGraw-Hill Companies, Inc. (The Registrant or the Company), incorporated in December 1925, is a leading global information services provider serving the financial services, education and business information markets with a wide range of information products and services. Additional markets include energy, construction, aerospace and defense, and marketing information services. The Company serves its customers through a broad range of distribution channels, including printed books, magazines and newsletters, online via Internet Websites and digital platforms, through wireless and traditional on-air broadcasting, and through a variety of conferences and trade shows.
 
    The Registrant’s 20,214 employees are located worldwide. They perform the vital functions of analyzing the nature of changing demands for information and of channeling the resources necessary to fill those demands. By virtue of the numerous copyrights and licensing, trademark, and other agreements, which are essential to such a business, the Registrant is able to collect, compile, and disseminate this information. All book and magazine manufacturing is handled through a number of independent contractors. The Registrant’s principal raw material is paper, and the Registrant has assured sources of supply, at competitive prices, adequate for its business needs.
 
    Descriptions of the Company’s principal products, broad services and markets, and significant achievements are hereby incorporated by reference from Exhibit (13), pages 20 and 21, containing textual material of the Registrant’s 2006 Annual Report to Shareholders.
 
    The Registrant has an investor kit available online and in print that includes the current (and prior years) Annual Report, Proxy Statement, Form 10-Qs, Form 10-K, all filings through EDGAR with the Securities and Exchange Commission, the current earnings release and information with respect to the Dividend Reinvestment and Direct Stock Purchase Program. For online access go to www.mcgraw-hill.com/investor_relations and click on Digital Investor Kit. Requests for printed copies, free of charge, can be e-mailed to investor_relations@mcgraw-hill.com or mailed to Investor Relations, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020-1095. You can call Investor Relations toll free at 866-436-8502. International callers may dial 212-512-2192.
 
    The Registrant has adopted a Code of Ethics for the Company’s Chief Executive Officer and Senior Financial Officers that applies to its chief executive officer, chief financial officer, and chief accounting officer. To access such code, go to the Corporate Governance section of the Company’s Investor Relations Web site at www.mcgraw-hill.com/investor_relations. Any waivers that may in the future be granted from such Code will be posted at such Web site address. In addition to its Code of Ethics for the Chief Executive Officer and Senior Financial Officers noted above, the following topics may be found on the Registrant’s Web site at the above Web site address:
    Code of Business Ethics for all employees;
 
    Corporate Governance Guidelines;
 
    Audit Committee Charter;
 
    Compensation Committee Charter; and
 
    Nominating and Corporate Governance Committee Charter.

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    The foregoing documents are also available in print, free of charge, to any shareholder who requests them. Requests for printed copies may be e-mailed to corporate_secretary@mcgraw-hill.com or mailed to the Corporate Secretary, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020-1095.
 
    You may also read and copy materials that the Company has filed with the Securities and Exchange Commission (SEC) at the SEC’s public reference room located at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. In addition, the Company’s filings with the Commission are available to the public on the Commission’s Web site at www.sec.gov. Several years of SEC filings are also available at the Company’s Investor Relations Web site. Go to www.mcgraw-hill.com/investor_relations and click on the SEC Filings link.
 
    Certifications
 
    The Company has filed the required certifications under Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 31.2 to its annual report on Form 10-K for the fiscal year ended December 31, 2006. In addition the Company has filed the required certifications under Section 906 of the Sarbanes-Oxley Act of 2002 as Exhibit 32 to its annual report on Form 10-K for the fiscal year ended December 31, 2006. After the 2007 Annual Meeting of Shareholders, the Company intends to file with the New York Stock Exchange the CEO certification regarding the Company’s compliance with the NYSE’s corporate governance listing standards as required by NYSE rule 303A. 12. Last year, the Company filed this CEO certification with the NYSE on May 19, 2006.
 
    Information as to Operating Segments
 
    The relative contribution of the operating segments of the Registrant and its subsidiaries to operating revenue, operating profit, long-lived assets and geographic information for the three years ended December 31, 2006, are included in Exhibit (13), on pages 59 and 60 in the Registrant’s 2006 Annual Report to Shareholders and is hereby incorporated by reference.
Item 1a. Risk Factors
    As required the Company is providing the following cautionary statements which identify factors that could cause the Company’s actual results to differ materially from historical and expected results. It is not possible to foresee or identify all such factors. Investors should not consider this list an exhaustive statement of all risks and uncertainties.
    Historical Growth Rates
 
      Continuance of the Company’s historical growth rate depends upon a number of uncertain events including the outcome of the Company’s strategies of expanding its penetration in global markets, introduction of new products and services, and acquisitions. Difficulties, delays or failure of the Company’s strategies could cause the future growth of the Company to differ materially from its historical growth rate.
 
    Changes in the Volume of Debt Securities Issued in Domestic and/or Global Capital Markets and Changes in Interest Rates and Other Volatility in the Financial Markets
 
      The Company’s results could be adversely affected by a reduction in the volume of debt securities issued in domestic and/or global capital markets. Unfavorable financial or economic conditions that either reduce investor demand for debt securities or reduce issuers’ willingness or ability to issue such securities could

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      reduce the number and dollar volume of debt issuance for which Standard & Poor’s provides ratings services. In addition, increases in interest rates or credit spreads, volatility in financial markets or the interest rate environment, significant political or economic events, defaults of significant issuers and other market and economic factors may negatively impact the general level of debt issuance, the debt issuance plans of certain categories of borrowers, and/or the types of credit-sensitive products being offered. A sustained period of market decline or weakness could also have a material adverse effect on the Company’s results.
 
    Changes in Educational Funding
 
      The Company’s U.S. educational textbook and testing businesses may be adversely affected by changes in state educational funding as a result of changes in legislation, both at the federal and state level, changes in the state procurement process and changes in the condition of the local, state or U.S. economy. While in the past few years the availability of state and federal funding for elementary and high school education has improved due to legislative mandates such as No Child Left Behind (NCLB) and Reading First, future changes in the state and local tax base could create an unfavorable environment, leading to state budget issues resulting in a decrease in educational funding.
 
    Cyclical Nature of Customers’ Businesses
 
      A significant portion of the Company’s sales are to customers in educational markets. The School Education Group and the industry it serves are influenced strongly by the magnitude and timing of state adoption opportunities. Approximately 20 states currently use an adoption process to purchase textbooks. In the remaining states, known as “open territories”, textbooks are purchased independently by local district or individual schools. The 2007 adoption market is projected to increase approximately by 9% to 16% as compared to 2006. While the adoption opportunities in 2007 and beyond are expected to increase there is no guarantee that the Company will be successful in the new state adoption market or in open territories.
 
    Changes in the Global Advertising Markets / Affiliation Agreements
 
      Although advertising’s impact on the McGraw-Hill Companies is approximately 5%, advertising is still a significant source of revenue in the Information & Media segment. In general, demand for advertising tends to correlate with changes in the level of economic activity in the United States and in the markets the Company serves. In addition, world, national and local events may affect advertising demand. Competition from other forms of media such as other magazines, broadcasters and Web sites, affects the Company’s ability to attract and retain advertisers. In addition, significant changes in the Company’s network affiliation agreements could affect the profitability of the Company’s broadcasting operations.
 
    Possible Loss of Market Share or Revenue Through Competition or Regulation
 
      The markets for credit ratings as well as research, investment and advisory services are very competitive. The Financial Services segment competes domestically and internationally on the basis of a number of factors, including quality of ratings, research and investment advice, client service, reputation, price, geographic scope, range of products and services, and technological innovation. In addition, in some of the countries in which Standard & Poor’s competes, governments may provide financial or other support to locally-based rating agencies and may from time to time establish official credit rating agencies, credit ratings criteria or procedures for evaluating local issuers. The financial services industry is also subject to the potential for

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      increasing regulation in the United States and abroad. The businesses conducted by the Financial Services segment are in certain cases regulated under the U.S. Credit Rating Agency Reform Act of 2006, Investment Advisers Act of 1940, the U.S. Securities Exchange Act of 1934, the National Association of Securities Dealers and/or the laws of the states or other jurisdictions in which they conduct business. In the past several years the U.S. Congress, the Securities and Exchange Commission (SEC), the European Commission, through the Committee of European Securities Regulators (CESR) and the International Organization of Securities Commissions (IOSCO), a global group of securities commissioners, have been reviewing the role of rating agencies and their processes and the need for greater oversight or regulations concerning the issuance of credit ratings or the activities of credit rating agencies. Local, national and multinational bodies have considered and adopted other legislation and regulations relating to credit rating agencies from time to time and are likely to continue to do so in the future. The Company does not believe that any new or currently proposed legislation, regulations or judicial determinations would have a materially adverse effect on its financial condition or results of operations. However, new legislation, regulations or judicial determinations applicable to credit rating agencies in the United States and abroad could affect the competitive position of Standard & Poor’s ratings services. Additional information on the SEC’s activities regarding rating agencies is provided in the Management’s Discussion and Analysis section of the Company’s 2006 Annual Report to Shareholders.
 
    Broadcasting Regulations
 
      The Company’s broadcast stations are subject to regulatory developments that may affect their future profitability. All television stations are subject to Federal Communication Commission (“FCC”) regulation. Television stations broadcast under licenses that are generally granted and renewed for a period of eight years. The FCC regulates television station operations in several ways, including, but not limited to, employment practices, political advertising, indecency and obscenity, sponsorship identification, children’s programming, issue-responsive programming, signal carriage, ownership, and engineering, transmissions, antenna and other technical matters.
 
    Introduction of New Products or Technologies
 
      The Company operates in highly competitive markets that are subject to rapid change, and the Company must continue to invest and adapt to remain competitive. There are substantial uncertainties associated with the Company’s efforts to develop new products and services for the markets it serves. The Company makes significant investments in new products and services that may not be profitable and even if they are profitable, operating margins for new products and businesses may be lower than the margins the Company has experienced historically. The Company also could experience threats to its existing businesses from the rise of new competitors due to the rapidly changing environment within which the Company operates. The Company relies on its information technology environment and certain critical databases, systems and applications to support key product and service offerings. The Company believes it has appropriate policies, processes and internal controls to ensure the stability of its information technology including security from unauthorized access and business continuity. The Company’s operating results may be adversely impacted by unanticipated system failures or data corruption.

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    Operating Costs and Expenses
 
      The Company’s major expense categories include employee compensation and printing, paper, and distribution costs for product-related manufacturing. The Company offers its employees competitive salary and benefit packages in order to attract and retain the quality employees required to grow and expand its businesses. Compensation costs are influenced by general economic factors, including those affecting the cost of health insurance and postretirement benefits, and any trends specific to the employee skill sets the Company requires. In addition, the Company’s reported earnings may be adversely affected by changes in pension costs and funding requirements due to poor investment returns and/or changes in pension regulations. Paper prices fluctuate based on the worldwide demand and supply for paper in general and for the specific types of paper used by the Company. The Company’s overall paper price increase is currently limited due to negotiated price reductions, long-term agreements, and short-term price caps for a portion of paper purchases that are not protected by long-term agreements. The Company’s books and magazines are printed by third parties. The Company typically has multi-year contracts for the production of books and magazines, a practice which reduces price fluctuations over the contract term. Any significant increase in these costs could adversely affect the Company’s results of operations. The Company makes significant investments in information technology data centers and other technology initiatives. Additionally, the Company makes significant investments in the development of programs for the el-hi market place. While the Company believes it is prudent in its investment strategies and execution of its implementation plans there is, however, no assurance as to the ultimate recoverability of these investments.
 
    Protection of Intellectual Property Rights
 
      The Company’s products comprise intellectual property delivered through a variety of media, including print, broadcast and digital. The ability to achieve anticipated results depends in part on the Company’s ability to defend its intellectual property against infringement. The Company’s operating results may be adversely affected by inadequate legal and technological protections for intellectual property and proprietary rights in some jurisdictions and markets.
 
    Exposure to Litigation
 
      The Company is involved in legal actions and claims arising in the ordinary course of business. In addition, the Company may face exposure from parties claiming damages as a result of Standard & Poor’s rating opinions. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding could have a material effect on the Company’s financial position and results of operations.
 
    Risk of Doing Business Abroad
 
      As the Company expands its operations overseas, it faces the increased risks of doing business abroad, including inflation, fluctuation in interest rates and currency exchange rates, changes in applicable laws and regulatory requirements, export and import restrictions, tariffs, nationalization, expropriation, limits on repatriation of funds, civil unrest, terrorism, unstable governments and legal systems, and other factors. Adverse developments in any of these areas could cause actual results to differ materially from historical and/or expected operating results.
       
Item 1b. Unresolved Staff Comments
    None

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Item 2. Properties
    The Registrant leases office facilities at 237 locations: 126 are in the United States. In addition, the Registrant owns real property at 21 locations, of which 9 are in the United States. The principal facilities of the Registrant are as follows:
                 
    Owned   Square    
    or   Feet    
Locations   Leased   (thousands)   Segment
Domestic
               
New York, NY
  leased     420     Various Segments
1221 Avenue of the Americas
               
 
               
New York, NY
  leased     1,041     Financial Services
55 Water Street
               
 
               
New York, NY
  leased     534     Various Segments
2 Penn Plaza
              Some space subleased to
 
              non-MH tenants
 
               
New York, NY
  leased     17     Subleased
22 Cortland Street
               
 
               
Hightstown, NJ
  owned            
Office & Data Center
        410     Various Segments
Warehouse
        407     Vacant
 
               
Blacklick, OH
  owned            
Book Distr. Ctr.
        558     McGraw-Hill Education
Office
        73      
 
               
DeSoto, TX
  leased     382     Distribution
Book Distr. Ctr.
               
 
               
DeSoto, TX
  leased     418     Distribution
Assembly Plant
               
 
               
Dubuque, IA
  leased     104     McGraw-Hill Education
Book Distr. Ctr.
Office and Warehouse
               
 
               
Groveport, OH
  leased     506     Distribution
Warehouse
               
 
               
Ashland, OH
  leased     602     Distribution
 
               
Columbus, OH
  owned     170     McGraw-Hill Education
 
               
Monterey, CA
  owned     215     McGraw-Hill Education
 
               
Centennial, CO
  owned     133     Various Segments
 
               
Lexington, MA
  leased     122     Information & Media
 
               
Burr Ridge, IL
  leased     140     McGraw-Hill Education

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    Owned   Square    
    or   Feet    
Locations   Leased   (thousands)   Segment
Denver, CO
  owned     88     Information & Media
 
               
Indianapolis, IN
  owned     54     Information & Media
 
               
Indianapolis, IN
  leased     127     McGraw-Hill Education
 
               
Washington, DC
  leased     69     Various Segments
 
               
Chicago, IL
  leased     152     Various Segments
 
               
Mather, CA
  leased     56     McGraw-Hill Education
 
               
Westlake Village, CA
  leased     102     Information & Media
 
               
Troy, MI
  leased     47     Information & Media
 
               
Foreign
               
 
               
Whitby, Canada
  owned            
Office
        80     McGraw-Hill Ryerson, Ltd.
Book Distr. Ctr.
        80     Some space subleased to
 
              non-MH tenants
 
               
Jurong, Singapore
  leased     92     McGraw-Hill Education
Office
              Some space subleased to
 
              non-MH tenants
 
               
Canary Wharf, London
  leased     266     Various Segments
 
               
Maidenhead, England
  leased     83     Various Segments
 
               
Tokyo, Japan
  leased     31     Various Segments
 
               
Madrid, Spain
  leased     102     McGraw-Hill Education
 
               
Cautitlan, Mexico
  leased     96     Distribution
 
               
Mexico City, Mexico
  leased     37     Various Segments
 
               
Ameerpet, India
  leased     33     Financial Services
 
               
New Delhi, India
  leased     52     McGraw-Hill Education
 
                     (India) Limited
    During 2006, leased domestic properties decreased by 56 primarily due to the closing of Dodge plan rooms and the formation of the School Solutions Group which resulted in office closings and staff consolidations.
 
    In January 2006, the office and warehouse location in Dubuque, IA was sold. The Company remains a tenant at this location.
 
    During 2005, new additions include locations in California and Michigan due to the acquisition of J.D. Power and Associates, and India due to the CRISIL Limited acquisition.
 
    During 2004, relocations took place internationally in London, Paris, Tokyo and Beijing. New additions also include new locations in India and New York due to the acquisition of Capital IQ, a location in New York City due to The Grow Network acquisition and a new distribution center in Groveport, Ohio.
 
    Effective March 2003, CB Richard Ellis took over the management of 40 U.S. facilities. CB Richard Ellis partnered with IKON (mail, reprographics) and EMCOR (facilities maintenance) to fulfill the agreement.

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Item 3. Legal Proceedings
    A writ of summons was served on The McGraw-Hill Companies, SRL and on The McGraw-Hill Companies, SA (both indirect subsidiaries of the Company) (collectively, “Standard & Poor’s”) on September 29, 2005 and October 7, 2005, respectively, in an action brought in the Tribunal of Milan, Italy by Enrico Bondi (“Bondi”), the Extraordinary Commissioner of Parmalat Finanziaria S.p.A. and Parmalat S.p.A. (collectively, “Parmalat”). Bondi has brought numerous other lawsuits in both Italy and the United States against entities and individuals who had dealings with Parmalat. In this suit, Bondi claims that Standard & Poor’s, which had issued investment grade ratings of Parmalat until shortly before Parmalat’s collapse in December 2003, breached its duty to issue an independent and professional rating and negligently and knowingly assigned inflated ratings in order to retain Parmalat’s business. Alleging joint and several liability, Bondi claims damages of euros 4,073,984,120 (representing the value of bonds issued by Parmalat and the rating fees paid by Parmalat) with interest, plus damages to be ascertained for Standard & Poor’s alleged complicity in aggravating Parmalat’s financial difficulties and/or for having contributed in bringing about Parmalat’s indebtedness towards its bondholders, and legal fees. The Company believes that Bondi’s allegations and claims for damages lack legal or factual merit. Standard & Poor’s filed its answer, counterclaim and third-party claims on March 16, 2006 and will continue to vigorously contest the action. The next hearing is scheduled for March 8, 2007.
 
    In a separate proceeding, the prosecutor’s office in Parma, Italy is conducting an investigation into the bankruptcy of Parmalat. In June 2006, the prosecutor’s office issued a Note of Completion of an Investigation (“Note of Completion”) concerning allegations, based on Standard & Poor’s investment grade ratings of Parmalat, that individual Standard & Poor’s rating analysts conspired with Parmalat insiders and rating advisors to fraudulently or negligently cause the Parmalat bankruptcy. The Note of Completion was served on eight Standard & Poor’s rating analysts.
 
    While not a formal charge, the Note of Completion indicates the prosecutor’s intention that the named rating analysts should appear before a judge in Parma for a preliminary hearing, at which hearing the judge will determine whether there is sufficient evidence against the rating analysts to proceed to trial. No date has been set for the preliminary hearing. On July 7, 2006, a defense brief was filed with the Parma prosecutor’s office on behalf of the rating analysts. The Company believes that there is no basis in fact or law to support the allegations against the rating analysts, and they will be vigorously defended by the subsidiaries involved.
 
    In addition, in the normal course of business both in the United States and abroad, the Company and its subsidiaries are defendants in numerous legal proceedings and are involved, from time to time, in governmental and self-regulatory agency proceedings, which may result in adverse judgments, damages, fines or penalties. Also, various governmental and self-regulatory agencies regularly make inquiries and conduct investigations concerning compliance with applicable laws and regulations. Based on information currently known by the Company’s management, the Company does not believe that any pending legal, governmental or self-regulatory proceedings or investigations will result in a material adverse effect on its financial condition or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
    No matters were submitted to a vote of Registrant’s security holders during the last quarter of the period covered by this Report.

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Executive Officers of the Registrant
             
Name   Age   Position
Harold McGraw III
    58     Chairman of the Board, President and Chief Executive Officer
 
           
Robert J. Bahash
    61     Executive Vice President and Chief Financial Officer
 
           
Peter C. Davis
    52     Executive Vice President, Global Strategy
 
           
Bruce D. Marcus
    58     Executive Vice President and Chief Information Officer
 
           
David L. Murphy
    61     Executive Vice President, Human Resources
 
           
Kenneth M. Vittor
    57     Executive Vice President and General Counsel
 
           
David B. Stafford
    44     Senior Vice President, Corporate Affairs and Executive Assistant to
      the Chairman, President and Chief Executive Officer
All of the above executive officers of the Registrant have been full-time employees of the Registrant for more than five years except for Peter Davis and David Murphy.
Mr. Davis, prior to becoming an officer of the Registrant on November 1, 2006 was a managing director at Novantas LLC, where he was responsible for the capital markets, asset management, and commercial and private banking practices. Prior to his tenure at Novantas, he was a partner at Booz Allen & Hamilton.
Mr. Murphy, prior to becoming an officer of the Registrant on July 22, 2002, spent most of his professional career with the Ford Motor Company where, most recently, he was Vice President, Human Resources.
Mr. Marcus, prior to becoming an officer of the Registrant on January 19, 2005, was Senior Vice President, Enterprise Systems, with responsibility for systems development across the Company. Prior to that, he was Vice President, Business Operations and Technology for Platts.
Mr. Stafford, prior to becoming an officer of the Registrant on February 2, 2006, was Associate General Counsel in the Company’s Legal Department.

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PART II
Item 5. Market for the Registrant’s Common Stock and Related Stockholder Matters and Issuer Purchases of Equity Securities
    On February 15, 2007, the closing price of the Registrant’s common stock was $67.69 per share as reported on the New York Stock Exchange. The approximate number of record holders of the Registrant’s common stock as of February 15, 2007 was 6,861.
                 
    2006   2005
Dividends per share of common stock:
               
$0.1815 per quarter in 2006
  $ 0.726          
$0.165 per quarter in 2005
          $ 0.66  
    On January 29, 2003, the Board of Directors authorized a stock repurchase program of up to 30 million additional shares, which was approximately 7.8% of the total shares (post-split) of the Company’s outstanding common stock as of January 29, 2003. As of December 31, 2005, 3.4 million shares remained available under the 2003 repurchase program. On January 24, 2006 the Board of Directors approved a new stock repurchase program authorizing the purchase of up to 45 million additional shares, which was approximately 12.1% of the total shares of the Company’s outstanding common stock as of January 24, 2006. In the first quarter of 2006, the Company repurchased 18.4 million shares, including 15 million shares from the new program and the 3.4 million shares remaining under the 2003 program. On April 26, 2006, the Board of Directors approved an additional 10 million shares for repurchase in 2006 under the existing program. The repurchase programs have no expiration date. The repurchased shares may be used for general corporate purposes, including the issuance of shares in connection with the exercise of employee stock options. Purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions. On January 31, 2007, the Board of Directors approved a new stock repurchase program (2007 program) authorizing the repurchase of up to 45 million additional shares.
 
    On March 30, 2006, the Company acquired 8.4 million shares of The McGraw-Hill Companies common stock from the holdings of the recently decreased William H. McGraw, in a related party transaction. The shares were purchased at a discount of approximately 2.4% from the March 30, 2006 New York Stock Exchange closing price through a private transaction with Mr. McGraw’s estate. The transaction was approved by the Financial Policy and Audit Committees of the Company’s Board of Directors. The Company received independent financial and legal advice concerning the purchase.
 
    The following table provides information on purchases made by the Company of its outstanding common stock during the fourth quarter of 2006 pursuant to the stock repurchase program authorized on January 24, 2006 by the Board of Directors (column c). In addition to purchases under the 2006 stock repurchase program, the number of shares in column (a) include; 1) shares of common stock that are tendered to the Registrant to satisfy the employees’ tax withholding obligations in connection with the vesting of awards of restricted performance shares (such shares are repurchased by the Registrant based on their fair market value on the vesting date), and 2) shares of the Registrant deemed surrendered to the Registrant to pay the exercise price and to satisfy the employees’ tax withholding obligations in connection with the exercise of employee stock options. There were no other share repurchases during the quarter outside the

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    stock repurchases noted below:
                                 
                    (c)Total Number    
                    of Shares    
    (a)Total           Purchased as   (d) Maximum Number
    Number of   (b)Average   Part of Publicly   of Shares that may
    Shares   Price Paid   Announced   yet be Purchased
Period   Purchased   per Share   Programs   Under the Programs
    (in millions)           (in millions)   (in millions)
(Oct. 1 – Oct. 31, 2006)
    0.5     $ 63.57       0.4       22.0  
(Nov. 1 – Nov. 30, 2006)
    1.4     $ 64.75       1.4       20.6  
(Dec. 1 – Dec. 31, 2006)
    0.6     $ 67.54       0.6       20.0  
Total – Qtr
    2.5     $ 65.16       2.4       20.0  
    Information concerning the high and low stock price of the Registrant’s common stock on the New York Stock Exchange is incorporated herein by reference from Exhibit (13), from page 78 of the 2006 Annual Report to Shareholders.
Item 6. Selected Financial Data
    Incorporated herein by reference from Exhibit (13), from the 2006 Annual Report to Shareholders, page 76 and page 77.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
    Incorporated herein by reference from Exhibit (13), from the 2006 Annual Report to Shareholders, pages 20 to 47.
Item 7a. Quantitative and Qualitative Disclosure about Market Risk
    Incorporated herein by reference from Exhibit (13), from the 2006 Annual Report to Shareholders, page 47 .
Item 8. Consolidated Financial Statements and Supplementary Data
    Incorporated herein by reference from Exhibit (13), from the 2006 Annual Report to Shareholders, pages 49 to 75.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    None
Item 9a. Controls and Procedures Disclosure Controls
    The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed with the Securities and Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.
    As of December 31, 2006, an evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the U.S. Securities Exchange Act of 1934). Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2006.

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    Management’s Annual Report on Internal Control Over Financial Reporting
    Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (Section 404) and as defined in Rules 13a-15(f) under the U.S. Securities Exchange Act of 1934, management is required to provide the following report on the Company’s internal control over financial reporting:
  1.   The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
 
  2.   The Company’s management has evaluated the system of internal control using the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework. Management has selected the COSO framework for its evaluation as it is a control framework recognized by the SEC and the Public Company Accounting Oversight Board that is free from bias, permits reasonably consistent qualitative and quantitative measurement of the Company’s internal controls, is sufficiently complete so that relevant controls are not omitted and is relevant to an evaluation of internal controls over financial reporting.
 
  3.   Based on management’s evaluation under this framework, we have concluded that the Company’s internal controls over financial reporting were effective as of December 31, 2006. There are no material weaknesses in the Company’s internal control over financial reporting that have been identified by management.
 
  4.   The Company’s independent registered public accounting firm, Ernst & Young LLP, have audited the consolidated financial statements of the Company for the year ended December 31, 2006, and have issued their reports on the financial statements and management’s assessment as to the effectiveness of internal controls over financial reporting under Auditing Standard No. 2 of the Public Company Accounting Oversight Board. These reports are located on pages 72 and 73 of the 2006 Annual Report to Shareholders.
    Other Matters
    There have been no changes in the Company’s internal controls over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9b. Other Information
    None

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PART III
Item 10. Directors and Executive Officers of the Registrant
    Incorporated herein by reference from the Registrant’s definitive proxy statement dated March 19, 2007 for the annual meeting of shareholders to be held on April 25, 2007.
Item 11. Executive Compensation
    Incorporated herein by reference from the Registrant’s definitive proxy statement dated March 19, 2007 for the annual meeting of shareholders to be held on April 25, 2007.
Item 12. Security Ownership of Certain Beneficial Owners and Management
    Incorporated herein by reference from the Registrant’s definitive proxy statement dated March 19, 2007 for the annual meeting of shareholders to be held April 25, 2007.
The following table details the Registrant’s equity compensation plans as of December 31, 2006:
2006
Equity Compensation Plan Information
                         
    (a)   (b)   (c)
                    Number of securities
    Number of           remaining available
    securities to be           for future issuance
    issued upon   Weighted-average   under equity
    exercise of   exercise price of   compensation plans
    outstanding   outstanding   (excluding
    options, warrants   options, warrants   securities reflected
Plan Category   and rights   and rights   in column (a))
Equity compensation plans approved by security holders
    34,998,134     $ 37.7149       23,054,461  
Equity compensation plans not approved by security holders
    0       0       0  
Total
    34,998,134 (1)   $ 37.7149       23,054,461 (2)(3)
 
(1)   Included in this number are 34,806,589 shares to be issued upon exercise of outstanding options under the Company’s Stock Incentive Plans and 191,545 deferred units already credited but to be issued under the Director Deferred Stock Ownership Plan.
 
(2)   Included in this number are 563,423 shares reserved for issuance under the Director Deferred Stock Ownership Plan. The remaining 22,491,035 shares are reserved for issuance under the 2002 Stock Incentive Plan (the “2002 Plan”) for Performance Stock, Restricted Stock, Other Stock-Based Awards, Stock Options and Stock Appreciation Rights (“SARs”).
 
(3)   Under the terms of the 2002 Plan, shares subject to an award (other than a stock option, SAR, or dividend equivalent) or shares paid in settlement of a dividend equivalent reduce the number of shares

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    available under the 2002 Plan by one share for each such share granted or paid; shares subject to a stock option or SAR reduce the number of shares available under the 2002 Plan by one-third of a share for each such share granted. The 2002 Plan stipulates that in no case, as a result of such share counting, may more than 19,000,000 shares of stock be issued thereunder. Accordingly, for purposes of setting forth the figures in this column, the base figure from which issuances of stock awards are deducted, is deemed to be 19,000,000 shares for the 2002 Plan plus shares reserved for grant immediately prior to the amendments to the 2002 Plan of April 28, 2004.
 
    The 2002 Plan is also governed by certain share recapture provisions. The aggregate number of shares of stock available under the 2002 Plan for issuance are increased by the number of shares of stock granted as an award under the 2002 Plan or 1993 Employee Stock Incentive Plan (the “1993 Plan”)(other than stock option, SAR or 1993 Plan stock option awards) or by one-third of the number of shares of stock in the case of stock option, SAR or 1993 Plan stock option awards that are, in each case: forfeited, settled in cash or property other than stock, or otherwise not distributable under an award under the Plan; tendered or withheld to pay the exercise or purchase price of an award under the 2002 or 1993 Plans or to satisfy applicable wage or other required tax withholding in connection with the exercise, vesting or payment of, or other event related to, an award under the 2002 or 1993 Plan; or repurchased by the Company with the option proceeds in respect of the exercise of a stock option under the 2002 or 1993 Plans.
Item 13. Certain Relationships and Related Transactions
    Incorporated herein by reference from the Registrant’s definitive proxy statement dated March 19, 2007 for the annual meeting of shareholders to be held April 25, 2007.
    On March 30, 2006, as part of its previously announced stock buyback program, the Company acquired 8.4 million shares of the Corporation’s stock from the holdings of the recently deceased William H. McGraw. The shares were purchased through the mixture of available cash and borrowings at a discount of approximately 2.4% from the March 30th New York Stock Exchange closing price through a private transaction with Mr. McGraw’s estate. This transaction closed on April 5, 2006 and the total purchase amount of $468.8 million was funded through a combination of cash on hand and borrowings in the commercial paper market. The transaction was approved by the Financial Policy and Audit Committees of the Company’s Board of Directors, and the Corporation received independent financial and legal advice concerning the purchase.
Item 14. Principal Accounting Fees and Services
    During the year ended December 31, 2006, Ernst & Young LLP audited the consolidated financial statements of the Corporation and its subsidiaries.
    Incorporated herein by reference from the Registrant’s definitive proxy statement dated March 19, 2007 for the annual meeting of shareholders to be held April 25, 2007.
Item 15. Exhibits and Financial Statement Schedules
  (a)1.   Financial Statements
      The Index to Financial Statements and Financial Statement Schedule on page 16 is incorporated herein by reference as the list of financial statements required as part of this report.

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  2.   Financial Statement Schedules
 
      The Index to Financial Statements and Financial Statement Schedule on page 16 is incorporated herein by reference as the list of financial statements required as part of this report.
 
  3.   Exhibits
 
      The exhibits filed as part of this annual report on Form 10-K are listed in the Exhibit Index on pages 21 to 23, immediately preceding such Exhibits, and such Exhibit Index is incorporated herein by reference.

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The McGraw-Hill Companies
Index to Financial Statements,
Financial Statement Schedules and Exhibits
                 
    Reference  
            Annual Report  
    Form     to Share-  
    10-K     holders (page)  
Data incorporated by reference from Annual Report to Shareholders:
               
 
               
Report of Management
            72  
 
               
Report of Independent Registered Public Accounting Firm
            73  
 
               
Report of Independent Registered Public Accounting Firm
            74  
 
               
Consolidated balance sheet at December 31, 2006 and 2005
            50-51  
 
               
Consolidated statement of income for each of the three years in the period ended December 31, 2006
            49  
 
               
Consolidated statement of cash flows for each of the three years in the period ended December 31, 2006
            52  
 
               
Consolidated statement of shareholders’ equity for each of the three years in the period ended December 31, 2006
            53  
 
               
Notes to consolidated financial statements
            54-71  
 
               
Quarterly financial information
            75  
 
               
Financial Statement Schedule:
               
 
               
Consolidated schedule for each of the three years in the period ended December 31, 2006
               
 
               
II — Reserves for doubtful accounts and sales returns
    17          
 
               
Consent of Independent Registered Public Accounting Firm
  Exhibit 23        
All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.
The financial statements listed in the above index which are included in the annual report to shareholders for the year ended December 31, 2006 are hereby incorporated by reference in Exhibit (13). With the exception of the pages listed in the above index, the 2006 annual report to shareholders is not to be deemed filed as part of Item 15 (a)(1).

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THE McGRAW-HILL COMPANIES, INC.
SCHEDULE II — RESERVES FOR DOUBTFUL ACCOUNTS AND SALES RETURNS
(Thousands of dollars)
                                         
    Balance at                           Balance  
    beginning     Charged                   at end  
Additions/(deductions)   of year     to income     Deductions     Other     of year  
                (A)     (B)        
Year ended 12/31/06
                                       
Allowance for doubtful accounts
  $ 74,396     $ 19,577     $ (20,568 )   $     $ 73,405  
Allowance for returns
    187,348       1,167                   188,515  
 
                             
 
  $ 261,744     $ 20,744     $ (20,568 )   $     $ 261,920  
 
                             
 
                                       
Year ended 12/31/05
                                       
Allowance for doubtful accounts
  $ 80,570     $ 18,896     $ (23,044 )   $ (2,026 )   $ 74,396  
Allowance for returns(C)
    178,128       9,220                   187,348  
 
                             
 
  $ 258,698     $ 28,116     $ (23,044 )   $ (2,026 )   $ 261,744  
 
                             
 
                                       
Year ended 12/31/04
                                       
Allowance for doubtful accounts
  $ 103,996     $ 7,796     $ (29,309 )   $ (1,913 )   $ 80,570  
Allowance for returns(C)
    187,621       (7,448 )           (2,045 )     178,128  
 
                             
 
  $ 291,617     $ 348     $ (29,309 )   $ (3,958 )   $ 258,698  
 
                             
 
(A)   Accounts written off, less recoveries.
 
(B)   In 2005, amounts primarily relate to the disposition of Corporate Value Consulting and the acquisitions of J.D. Power and Associates and Vista Research, Inc. In 2004, amounts primarily relate to the disposition of the Juvenile Retail Publishing business and the acquisitions of Capital IQ and Grow Network.
 
(C)   In 2005, the prior year balance sheets were restated to reflect a reclassification. This reclassification was related to the accounting for sales returns and impacted net accounts receivable, inventory and accrued royalties. The impact resulted in an increase in the allowance for sales returns of $49.0 million and $51.8 million in 2004 and 2003, respectively.

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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
The McGraw-Hill Companies, Inc.
 
Registrant
   
         
By:
       
 
  /s/ Kenneth M. Vittor
 
Kenneth M. Vittor
   
 
  Executive Vice President and    
 
  General Counsel    
 
  February 28, 2007    
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on February 28, 2007 on behalf of Registrant by the following persons who signed in the capacities as set forth below under their respective names. Registrant’s board of directors is comprised of eleven members and the signatures set forth below of individual board members, constitute at least a majority of such board.
         
 
  /s/ Harold W. McGraw III
 
Harold W. McGraw III
   
 
  Chairman, President and    
 
  Chief Executive Officer    
 
       
 
  /s/ Robert J. Bahash
 
Robert J. Bahash
   
 
  Executive Vice President and    
 
  Chief Financial Officer    

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  /s/ Talia M. Griep
 
Talia M. Griep
   
 
  Corporate Controller    
 
  and Senior Vice President,    
 
  Global Business Services &    
 
  Financial Planning    
 
       
 
  /s/ Pedro Aspe
 
Pedro Aspe
   
 
  Director    
 
       
 
  /s/ Sir Winfried F.W. Bischoff
 
Sir Winfried F.W. Bischoff
   
 
  Director    
 
       
 
  /s/ Douglas N. Daft
 
Douglas N. Daft
   
 
  Director    
 
       
 
  /s/ Linda Koch Lorimer
 
Linda Koch Lorimer
   
 
  Director    
 
       
 
   
 
Robert P. McGraw
   
 
  Director    
 
       
 
  /s/ Hilda Ochoa-Brillembourg
 
Hilda Ochoa-Brillembourg
   
 
  Director    

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  /s/ James H. Ross
 
James H. Ross Director
   
 
       
 
  /s/ Edward B. Rust, Jr.
 
Edward B. Rust, Jr.
   
 
  Director    
 
       
 
  /s/ Kurt L. Schmoke
 
Kurt L. Schmoke
   
 
  Director    
 
       
 
  /s/ Sidney Taurel
 
Sidney Taurel
   
 
  Director    

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Exhibit    
Number   Exhibit Index
( 3)
  Certificate of Incorporation of Registrant, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 1993 and Form 10-Q for the quarter ended June 30, 1998.
 
   
(3)
  Amendment to Certificate of Incorporation of Registrant, incorporated by reference from Registrant’s Form 8-K filed April 27, 2005.
 
   
(3)
  Amendment to By-laws of Registrant, as incorporated by reference from Registrant’s Form 8-K dated January 31, 2007.
 
   
(10.1)
  Indenture dated as of June 15, 1990 between the Registrant, as issuer, and The Bank of New York, as trustee, incorporated by reference from Registrant’s Form SE filed August 3, 1990 in connection with Registrant’s Form 10-Q for the quarter ended June 30, 1990.
 
   
(10.2)
  Instrument defining the rights of security holders, certificate setting forth the terms of the Registrant’s Medium-Term Notes, Series A, incorporated by reference from Registrant’s Form SE filed November 15, 1990 in connection with Registrant’s Form 10-Q for the quarter ended September 30, 1990.
 
   
(10.3)
  Form of Indemnification Agreement between Registrant and each of its directors and certain of its executive officers, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.4)*
  Registrant’s 1987 Key Employee Stock Incentive Plan, as amended and restated as of December 6, 2006.
 
   
(10.5)*
  Registrant’s Amended and Restated 1993 Employee Stock Incentive Plan, as amended and restated as of December 6, 2006.
 
   
(10.6)*
  Registrant’s Amended and Restated 2002 Stock Incentive Plan, as amended and restated as of December 6, 2006.
 
   
(10.7)*
  Form of Restricted Performance Share Terms and Conditions, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.8)*
  Form of Restricted Performance Share Award, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.9)*
  Form of Stock Option Award, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.10)*
  Registrant’s Key Executive Short Term Incentive Compensation Plan, as amended and restated effective as of January 1, 2006.
 
   
(10.11)*
  Registrant’s Key Executive Short-Term Incentive Deferred Compensation Plan, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2002.
 
   
(10.12)*
  Registrant’s Executive Deferred Compensation Plan, incorporated by reference from Registrant’s Form SE filed March 28, 1991 and in connection with Registrant’s Form 10-K for the fiscal year ended December 31, 1990.
 
   
(10.13)*
  Registrant’s Management Severance Plan, as amended and restated as of October 23, 2003, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.

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Exhibit    
Number   Exhibit Index
(10.14)*
  Registrant’s Executive Severance Plan, as amended and restated as of October 23, 2003, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.15)*
  Registrant’s Senior Executive Severance Plan, as amended and restated as of October 23, 2003.
 
   
(10.16)
  $1,200,000 Five-Year Credit Agreement dated as of July 20, 2004 among the Registrant, the lenders listed therein, and JP Morgan Chase Bank, as administrative agent, incorporated by reference from The Registrant’s Form 8-K dated July 22, 2004.
 
   
(10.17)*
  Registrant’s Employee Retirement Account Plan Supplement, including amendments adopted through April 26, 2000, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.18)*
  Registrant’s Employee Retirement Plan Supplement, as amended December 20, 2005, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2005.
 
   
(10.19)*
  Registrant’s Savings Incentive Plan Supplement, as amended and restated as of January 1, 2004, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.20)*
  Registrant’s Management Supplemental Death and Disability Benefits Plan, as amended January 24, 2006, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2005.
 
   
(10.21)*
  Registrant’s Senior Executive Supplemental Death, Disability & Retirement Benefits Plan, as amended January 24, 2006, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2005.
 
   
(10.22)*
  Resolutions amending certain of Registrant’s equity and compensation plans, as adopted on February 23, 2000, with respect to definitions of “Cause” and “Change of Control” contained therein, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2000.
 
   
(10.23)*
  Registrant’s Director Retirement Plan, incorporated by reference from Registrant’s Form SE filed March 29, 1990 in connection with Registrant’s Form 10-K for the fiscal year ended December 31, 1989.
 
   
(10.24)*
  Resolutions Freezing Existing Benefits and Terminating Additional Benefits under Registrant’s Directors Retirement Plan, as adopted on January 31, 1996, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 1996.
 
   
(10.25)*
  Registrant’s Director Deferred Compensation Plan, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2003.
 
   
(10.26)*
  Director Deferred Stock Ownership Plan, as amended and restated as of January 29, 2003, incorporated by reference from Registrant’s Form 10-K for the fiscal year ended December 31, 2004.
 
   
(10.27)*
  Aircraft Timeshare Agreement, dated as of September 15, 2004, by and between Standard & Poor’s Securities Evaluations, Inc. and Harold McGraw III, incorporated by reference from the Registrant’s Form 10-Q for the quarter ended September 30, 2004.
 
   
(10.28)*
  Amendment to the Registrant’s and Standard & Poor’s Employee Retirement Plan Supplements, dated December 8, 2006.

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Exhibit    
Number   Exhibit Index
(12)
  Computation of ratio of earnings to fixed charges.
 
   
(13)
  Registrant’s 2006 Annual Report to Shareholders. Such Report, except for those portions thereof which are expressly incorporated by reference in this Form 10-K, is furnished for the information of the Commission and is not deemed “filed” as part of this Form 10-K.
 
   
(21)
  Subsidiaries of the Registrant.
 
   
(23)
  Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
 
   
(31.1)
  Annual Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
   
(31.2)
  Annual Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
   
(32)
  Annual Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99)
  Amendment to Rights Agreement, dated as of July 27, 2005, by and between the Registrant and The Bank of New York, as Rights Agent, incorporated by reference from Form 8-A/A filed August 3, 2005.
 
*   These exhibits relate to management contracts or compensatory plan arrangements.

23

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