S&P Global Inc. — Annual Report 2006

Feb 28, 2007

10-K 1 y30806e10vk.htm FORM 10-K FORM 10-K PAGEBREAK

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 þ No

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.

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TABLE OF CONTENTS

Item
PART I
1. Business	1
1a. Risk Factors	2
1b. Unresolved Staff Comments	5
2. Properties	6
3. Legal Proceedings	8
4. Submission of Matters to a Vote of Security Holders	8
Executive Officers of the Registrant	9
PART II
5. Market for the Registrant’s Common Stock and Related Stockholder Matters and Issuer Purchases of Equity Securities	10
6. Selected Financial Data	11
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
7a. Quantitative and Qualitative Disclosure about Market Risk	11
8. Consolidated Financial Statements and Supplementary Data	11
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11
9a. Controls and Procedures	11
9b. Other Information	12
PART III
10. Directors and Executive Officers of the Registrant	13
11. Executive Compensation	13
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	13
13. Certain Relationships and Related Transactions	14
14. Principal Accounting Fees and Services	14
PART IV
15. Exhibits and Financial Statement Schedules	14
Index to Financial Statements, Financial Statement Schedules and Exhibits	16
Supplementary Schedule	17
Signatures	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

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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 — or	Square — 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 — or	Square — 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		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
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.

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