Segment and Related Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment and Related Information

Segment and Related Information

We have four reportable segments: S&P Ratings, S&P Capital IQ, S&P DJ Indices and C&C. Our Chief Executive Officer is our chief operating decision-maker and evaluates performance of our segments and allocates resources based primarily on operating profit. Segment operating profit does not include unallocated expense or interest expense as these are costs that do not affect the operating results of our segments.

As part of our transformation to McGraw Hill Financial, a comprehensive review of our accounting and reporting practices and policies was undertaken. As a result, beginning on January 1, 2014, to the extent they can be attributed to our continuing operations, all shared operating services have been allocated to the segments utilizing a methodology that more closely aligns with each segment's usage of these services. The costs that remain in unallocated expense primarily relate to corporate center functions and shared operating costs allocable to discontinued operations reclassified during the current year. The updated methodology is reflected in the segment results for the three and nine months ended September 30, 2014 and accordingly, the segment results for the prior-year comparative periods have been reclassified to conform with the new presentation.

A summary of operating results by segment for the periods ended September 30 is as follows:

Three Months	2014						2013
(in millions)	Revenue			Operating Profit			Revenue			Operating Profit
S&P Ratings	$	604		$	183		$	540		$	230
S&P Capital IQ	311			64			293			50
S&P DJ Indices	143			86			124			77
C&C 1	227			71			213			87
Intersegment elimination 2	(22		)	—			(18		)	—
Total operating segments	1,263			404			1,152			444
Unallocated expense 3	—			(38		)	—			(49		)
Total	$	1,263		$	366		$	1,152		$	395

Nine Months	2014						2013
(in millions)	Revenue			Operating Profit			Revenue			Operating Profit
S&P Ratings	$	1,837		$	730		$	1,701		$	748
S&P Capital IQ	919			172			868			149
S&P DJ Indices	412			260			363			218
C&C 1	657			217			621			214
Intersegment elimination 2	(64		)	—			(57		)	—
Total operating segments	3,761			1,379			3,496			1,329
Unallocated expense 3	—			(118		)	—			(242		)
Total	$	3,761		$	1,261		$	3,496		$	1,087

¹  McGraw Hill Construction has historically been part of the C&C segment. In accordance with the presentation of McGraw Hill Construction as a discontinued operation, the results of operations, inclusive of corporate overhead allocations, for all periods presented have been reclassified out of C&C's results to reflect this change. See Note 2 —Acquisitions and Divestitures for further discussion.

²  Revenue for S&P Ratings and expenses for S&P Capital IQ include an intersegment royalty charged to S&P Capital IQ for the rights to use and distribute content and data developed by S&P Ratings.

³  The three and nine months ended September 30, 2014 include a restructuring charge of $7 million. The three and nine months ended September 30, 2013 include costs necessary to enable the separation of MHE and reduce our cost structure of $10 million and $64 million, respectively. The nine months ended September 30, 2013 also includes pre-tax legal settlements of approximately $77 million.

See Note 2 —Acquisitions and Divestitures and Note 9 —Restructuring for additional actions that impacted the segment operating results.