Commitments and Contingencies

Rental Expense and Lease Obligations

In December of 2003, we sold our 45% equity investment in Rock-McGraw, Inc., which owns our headquarters building in New York City, and remained an anchor tenant in our corporate headquarters building in New York City by concurrently leasing back space from the buyer through 2020. In December of 2013, we entered into an arrangement with the buyer to shorten the lease to December 2015 in exchange for approximately $60 million which was recorded as a reduction to the unrecognized deferred gain from the sale. The remaining gain is being amortized over the remaining lease term as a reduction in rent expense.

As of June 30, 2014, the remaining deferred gain was $34 million, as $6 million and $12 million was amortized during the three and six months ended June 30, 2014, respectively. Interest expense associated with this operating lease was less than $1 million for the three months ended June 30, 2014 and $1 million for the six months ended June 30, 2014.

Legal Matters

The following amends the disclosure in Note 12 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K.

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In connection with the numerous actions brought against the Company and Standard & Poor's Financial Services LLC subsidiary ("S&P LLC") by the attorneys general of various states and the District of Columbia, the Company and S&P LLC had removed most of the actions to federal court and obtained an order consolidating the cases before the United States District Court for the Southern District of New York. The states moved to have the cases remanded to state court. Those motions to remand were granted on June 3, 2014; the cases are now proceeding in their respective state courts. Discovery in these cases is ongoing.


•	In connection with the Parmalat civil proceedings, the Court of Appeals of Milan issued an Order on July 2, 2014, reopening the proceedings to allow the parties to submit additional pleadings. Submissions are due no later than October 9, 2014 and a hearing has been scheduled for October 29, 2014.

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On July 22, 2014, the Company received a “Wells Notice” from the Staff of the U.S. Securities and Exchange Commission (the “SEC”) stating that the Staff has made a preliminary determination to recommend that the SEC institute an enforcement action against Standard & Poor’s Ratings Services (“S&P Ratings”), alleging violations of federal securities laws with respect to S&P Rating’s ratings of six commercial mortgage backed securities transactions issued in 2011, and public disclosure made by S&P Ratings regarding those ratings thereafter. In connection with the contemplated action, the Staff may recommend that the SEC seek remedies that include a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and remedial sanctions such as revocation or suspension of S&P Rating's NRSRO registration. The Wells Notice is neither a formal allegation nor a finding of wrongdoing. It allows S&P Ratings the opportunity to provide its perspective and to address the issues raised by the Staff before any decision is made by the SEC on whether to authorize the commencement of an enforcement proceeding. S&P Ratings has been cooperating with the SEC in this matter and intends to continue to do so.

There were no other amendments to the disclosures in Note 12 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K, including to the disclosure of the Department of Justice's civil complaint filed on February 4, 2013 in the United States District Court for the Central District of California against the Company and S&P LLC alleging violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 regarding Standard & Poor's Rating Services ratings in 2004 - 2007 of certain U.S. collateralized debt obligations and Standard & Poor's Ratings Services models for certain structured finance products.

We believe that the claims asserted and/or contemplated in the proceedings described in Note 12 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K, and amended above, have no basis and they will be vigorously defended by the Company and/or the subsidiaries involved.

In view of the inherent difficulty of predicting the outcome of legal matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories, involve a large number of parties or are in early stages of discovery, we cannot state with confidence what the eventual outcome of the pending matters described in Note 12 — Commitments and Contingencies to the consolidated financial statements of our Form 10-K, and amended above, will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss, fines, penalties or impact related to each pending matter may be. We believe, based on our current knowledge, the outcome of the legal actions, proceedings and investigations currently pending should not have a material, adverse effect on our consolidated financial statements.