Acquisitions and Divestitures

Acquisitions

In July of 2014, we acquired Eclipse Energy Holdings AS and its operating subsidiaries (“Eclipse”) that will be integrated into our C&C segment. Eclipse provides a comprehensive suite of data and analytics products on the European natural gas and liquefied natural gas markets as well as a range of advisory services leveraging Eclipse’s knowledge base, data capabilities, and modeling suite of products. This transaction complements our North American natural gas capabilities we obtained from our Bentek Energy LLC acquisition in 2011. We will account for the acquisition of Eclipse using the purchase method of accounting. The acquisition of Eclipse is not material to our consolidated financial statements.

In March of 2014, we acquired the intellectual property of a family of Broad Market Indices (“BMI”) from Citigroup Global Markets Inc., that is integrated into our S&P DJ Indices segment. The BMI provides a broad measure of the global equities markets which includes approximately 11,000 companies in more than 52 countries covering both developed and emerging markets. We accounted for the acquisition of the intellectual property on a cost basis and it was not material to our consolidated financial statements.

During the six months ended June 30, 2013, we did not complete any acquisitions.

As part of CRISIL's acquisition of Coalition Development Ltd. that occurred in July 2012, we made contingent purchase price payments in the first six months of 2014 and 2013 for $11 million and $12 million, respectively. This has been reflected in the consolidated statement of cash flows as a financing activity.

Divestitures

On June 30, 2014, we completed the sale of our data center to Quality Technology Services, LLC which owns, operates, and manages data centers. Proceeds from the sale were $58 million which are recorded within other current assets in the consolidated balance sheet due to timing of the receipt of payment. The sale includes all of the facilities and equipment on the south campus of our East Windsor, New Jersey location, inclusive of the rights and obligations associated with an adjoining solar power field. The sale resulted in an expense of $3 million recorded within other loss in our consolidated statement of income, which is in addition to the non-cash impairment charge we recorded in the fourth quarter of 2013.

On March 22, 2013, we completed the sale of McGraw-Hill Education ("MHE") to investment funds affiliated with Apollo Global Management, LLC for a purchase price of $2.4 billion in cash. We recorded an after-tax gain on the sale of $612 million for the six months ended June 30, 2013, which is included in discontinued operations, net in the consolidated statement of income. During the three months ended September 30, 2013, we adjusted the after tax gain on the sale of MHE, primarily due to post-closing working capital adjustments. For the year ended December 31, 2013, we recorded an after-tax gain on the sale of $589 million. We have used a portion of the after-tax proceeds from the sale to pay down short-term debt, for the special dividend paid in 2012, and to continue share repurchases. We intend to continue to use a portion of the after-tax proceeds to make selective acquisitions and support general corporate purposes.

The key components of income from discontinued operations for the periods ended June 30, 2013 consist of the following:



(in millions)	Three Months			Six Months
Revenue	$	—		$	268
Expenses	(2		)	312
Operating income (loss)	2			(44		)
Interest expense, net	—			1
Income (loss) before taxes on income (loss)	2			(45		)
Benefit for taxes on income (loss) ¹	(2		)	(18		)
Income (loss) from discontinued operations, net of tax	4			(27		)
Pre-tax gain on sale from discontinued operations	—			920
Provision for taxes on income	—			308
Gain on sale of discontinued operations, net of tax	—			612
Discontinued operations, net	4			585
Less: net loss attributable to noncontrolling interests	—			1
Income from discontinued operations attributable to McGraw Hill Financial, Inc. common shareholders	$	4		$	586


¹	Benefit for taxes on income for the three months ended June 30, 2013 includes certain adjustments to the discontinued operations provision recorded for the three months ended March 31, 2013.