Growth and Value Plan

On September 12, 2011, we announced that our Board of Directors have unanimously approved a comprehensive Growth and Value Plan that includes separation into two companies: McGraw-Hill Financial, focused on content and analytics for the financial markets, and McGraw-Hill Education ("MHE") focused on education services and digital learning.

We expect to be in a position to separate into two companies by the end of 2012. The timing of completing the separation of the education business is dependent on a number of factors, including whether the separation occurs through a spin-off to the Company's shareholders or a sale. Both a spin-off and a sale of MHE are subject to various conditions and regulatory approvals, including final Board approval.

Upon completion of either a spin-off or a sale of MHE, we will reorganize to a new management and segment reporting structure. As part of these organizational changes, we will assess the reporting units and perform valuations to determine the assignment of goodwill to any new reporting units based on their relative fair values. We will also test the recoverability of goodwill based on the identification of any new reporting units.

If the separation occurs through a spin-off to the Company's shareholders each shareholder of McGraw-Hill will receive one share of McGraw-Hill Education, Inc. common stock for every three shares of McGraw-Hill common stock held on the record date for the share distribution. Current holders of McGraw-Hill stock will also retain their shares of McGraw-Hill.

We received a favorable tax ruling from the Internal Revenue Service on April 23, 2012, which provides that the spin-off of McGraw-Hill Education, Inc. will be tax free to the Company and its shareholders. In addition, we filed the initial McGraw-Hill Education, Inc. Form 10 registration statement with the U.S. Securities and Exchange Commission on July 11, 2012, and filed amendments to that Form 10 registration statement on September 20, 2012 and October 23, 2012. While we are pursuing a separation as described above we are also actively evaluating other options to deliver shareholder value, including a potential sale of MHE. See Part II, Item 1a, Risk Factors for updates to certain risk factors related to the spin-off or sale.

The table below summarizes our costs related to the Growth and Value Plan including restructuring charges for the periods ended September 30, 2012:



(in millions)	Three Months		Nine Months
Professional fees	$	40	$	84
Restructuring charges	50		50
Transaction costs for our S&P/Dow Jones Indices, LLC joint venture	—		15
Charges related to our lease commitments	3		11
Miscellaneous charges	6		14
	$	99	$	174

These are costs necessary to enable separation, reduce our cost structure, accelerate growth and increase shareholder value. Total costs incurred to date related to the Growth and Value Plan are $184 million.

The Growth and Value Plan costs are included in selling and general expenses in our consolidated statements of income for the periods ended September 30 is as follows:



(in millions)	Three Months				Nine Months
	2012		2011		2012		2011
Growth and Value Plan costs	$	99	$	—	$	174	$	—
Other selling and general expenses	602		552		1,637		1,635
Total selling and general expenses	$	701	$	552	$	1,811	$	1,635