Condensed Consolidating Financial Statements

On May 26, 2015, we issued $700 million of 4.0% senior notes due in 2025. On August 18, 2015, we issued $2.0 billion of senior notes, consisting of $400 million of 2.5% senior notes due in 2018, $700 million of 3.3% senior notes due in 2020 and $900 million of 4.4% senior notes due in 2026.

The senior notes described above are fully and unconditionally guaranteed by Standard & Poor's Financial Services LLC, a 100% owned subsidiary of the Company. The following condensed consolidating financial statements present the results of operations, financial position and cash flows of McGraw Hill Financial, Inc., Standard & Poor's Financial Services LLC, and the Non-Guarantor Subsidiaries of McGraw Hill Financial, Inc. and Standard & Poor's Financial Services LLC, and the eliminations necessary to arrive at the information for the Company on a consolidated basis.



	Statement of Income
	Three Months Ended September 30, 2015
	(Unaudited)
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	165		$	523	$	665		$	(29	)	$	1,324
Expenses:
Operating-related expenses	20			99		317			(29		)	407
Selling and general expenses	206			69		195			—			470
Depreciation	9			4		7			—			20
Amortization of intangibles	—			—		17			—			17
Total expenses	235			172		536			(29		)	914
Operating (loss) profit	(70		)	351		129			—			410
Interest expense (income), net	32			—		(2		)	—			30
Non-operating intercompany transactions	51			48		(99		)	—			—
(Loss) income from continuing operations before taxes on income	(153		)	303		230			—			380
(Benefit) provision for taxes on income	(74		)	100		73			—			99
Equity in net income of subsidiaries	1,180			206		—			(1,386		)	—
Net income	$	1,101		$	409	$	157		$	(1,386	)	$	281
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(29		)	(29		)
Net income attributable to McGraw Hill Financial, Inc.	$	1,101		$	409	$	157		$	(1,415	)	$	252
Comprehensive income	$	1,095		$	408	$	123		$	(1,386	)	$	240



	Statement of Income
	Nine Months Ended September 30, 2015
	(Unaudited)
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	481		$	1,640	$	1,902		$	(85	)	$	3,938
Expenses:
Operating-related expenses	64			396		843			(85		)	1,218
Selling and general expenses	282			243		609			—			1,134
Depreciation	29			14		21			—			64
Amortization of intangibles	—			—		40			—			40
Total expenses	375			653		1,513			(85		)	2,456
Other income	—			—		(11		)	—			(11		)
Operating profit	106			987		400			—			1,493
Interest expense (income), net	69			—		(7		)	—			62
Non-operating intercompany transactions	180			139		(319		)	—			—
(Loss) income from continuing operations before taxes on income	(143		)	848		726			—			1,431
(Benefit) provision for taxes on income	(57		)	291		205			—			439
Equity in net income of subsidiaries	1,180			205		—			(1,385		)	—
Net income	$	1,094		$	762	$	521		$	(1,385	)	$	992
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(83		)	(83		)
Net income attributable to McGraw Hill Financial, Inc.	$	1,094		$	762	$	521		$	(1,468	)	$	909
Comprehensive income	$	1,102		$	761	$	480		$	(1,390	)	$	953



	Statement of Income
	Three Months Ended September 30, 2014
	(Unaudited)
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	149		$	507	$	635		$	(28	)	$	1,263
Expenses:
Operating-related expenses	19			142		269			(28		)	402
Selling and general expenses	147			150		165			—			462
Depreciation	10			4		7			—			21
Amortization of intangibles	1			—		11			—			12
Total expenses	177			296		452			(28		)	897
Operating (loss) profit	(28		)	211		183			—			366
Interest expense (income), net	15			—		(3		)	—			12
Non-operating intercompany transactions	56			13		(69		)	—			—
(Loss) income from continuing operations before taxes on income	(99		)	198		255			—			354
(Benefit) provision for taxes on income	(5		)	53		91			—			139
Equity in net income of subsidiaries	286			63		—			(349		)	—
Income from continuing operations	192			208		164			(349		)	215
Income from discontinued operations, net of tax	2			—		—			—			2
Net income	$	194		$	208	$	164		$	(349	)	$	217
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(27		)	(27		)
Net income attributable to McGraw Hill Financial, Inc.	$	194		$	208	$	164		$	(376	)	$	190
Comprehensive income	$	186		$	208	$	109		$	(353	)	$	150



	Statement of Income
	Nine Months Ended September 30, 2014
	(Unaudited)
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	443		$	1,535	$	1,869		$	(86	)	$	3,761
Expenses:
Operating-related expenses	59			450		782			(86		)	1,205
Selling and general expenses	241			394		551			—			1,186
Depreciation	30			13		21			—			64
Amortization of intangibles	2			—		34			—			36
Total expenses	332			857		1,388			(86		)	2,491
Other loss	3			—		6			—			9
Operating profit	108			678		475			—			1,261
Interest expense (income), net	46			—		(6		)	—			40
Non-operating intercompany transactions	130			27		(157		)	—			—
(Loss) income from continuing operations before taxes on income	(68		)	651		638			—			1,221
Provision for taxes on income	8			225		195			—			428
Equity in net income of subsidiaries	786			186		—			(972		)	—
Income from continuing operations	710			612		443			(972		)	793
Income from discontinued operations, net of tax	15			—		—			—			15
Net income	$	725		$	612	$	443		$	(972	)	$	808
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(77		)	(77		)
Net income attributable to McGraw Hill Financial, Inc.	$	725		$	612	$	443		$	(1,049	)	$	731
Comprehensive income	$	701		$	588	$	415		$	(981	)	$	723



	Balance Sheet
	September 30, 2015
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC			Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	161		$	1		$	1,279		$	—		$	1,441
Accounts receivable, net of allowance for doubtful accounts	109			282			595			—			986
Intercompany receivable	313			1,480			1,124			(2,917		)	—
Deferred income taxes	72			172			(41		)	—			203
Prepaid and other current assets	93			4			109			—			206
Total current assets	748			1,939			3,066			(2,917		)	2,836
Property and equipment, net of accumulated depreciation	124			3			110			—			237
Goodwill	15			41			2,903			9			2,968
Other intangible assets, net	—			—			1,887			(6		)	1,881
Asset for pension benefits	—			—			61			—			61
Investments in subsidiaries	4,547			671			7,280			(12,498		)	—
Intercompany loans receivable	17			361			1,817			(2,195		)	—
Other non-current assets	69			19			92			—			180
Total assets	$	5,520		$	3,034		$	17,216		$	(17,607	)	$	8,163
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	69		$	42		$	100		$	—		$	211
Intercompany Payable	1,671			593			568			(2,832		)	—
Accrued compensation and contributions to retirement plans	108			73			139			—			320
Income taxes currently payable	16			—			43			—			59
Unearned revenue	269			565			619			—			1,453
Accrued legal and regulatory settlements	—			104			—			—			104
Other current liabilities	267			(134		)	225			—			358
Total current liabilities	2,400			1,243			1,694			(2,832		)	2,505
Long-term debt	3,489			—			—			—			3,489
Intercompany loans payable	108			(3		)	2,178			(2,283		)	—
Pension and postretirement benefits	218			—			60			—			278
Deferred income taxes	(224		)	51			263			—			90
Other non-current liabilities	217			12			59			(1		)	287
Total liabilities	6,208			1,303			4,254			(5,116		)	6,649
Redeemable noncontrolling interest	—			—			—			810			810
Equity:
Common stock	412			—			2,321			(2,321		)	412
Additional paid-in capital	(197		)	1,171			10,156			(10,689		)	441
Retained income	6,641			560			784			(393		)	7,592
Accumulated other comprehensive loss	(310		)	—			(279		)	36			(553		)
Less: common stock in treasury	(7,234		)	—			(20		)	20			(7,234		)
Total equity - controlling interests	(688		)	1,731			12,962			(13,347		)	658
Total equity - noncontrolling interests	—			—			—			46			46
Total equity	(688		)	1,731			12,962			(13,301		)	704
Total liabilities and equity	$	5,520		$	3,034		$	17,216		$	(17,607	)	$	8,163



	Balance Sheet
	December 31, 2014
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC			Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,402		$	—		$	1,095		$	—		$	2,497
Accounts receivable, net of allowance for doubtful accounts	120			293			519			—			932
Intercompany receivable	525			2,125			1,998			(4,648		)	—
Deferred income taxes	72			334			(43		)	—			363
Prepaid and other current assets	80			27			67			—			174
Total current assets	2,199			2,779			3,636			(4,648		)	3,966
Property and equipment, net of accumulated depreciation	111			5			90			—			206
Goodwill	109			41			1,228			9			1,387
Other intangible assets, net	13			—			991			—			1,004
Asset for pension benefits	—			—			28			—			28
Investments in subsidiaries	1,258			653			7,125			(9,036		)	—
Intercompany loans receivable	19			358			1,595			(1,972		)	—
Other non-current assets	81			25			74			—			180
Total assets	$	3,790		$	3,861		$	14,767		$	(15,647	)	$	6,771
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	59		$	45		$	87		$	—		$	191
Intercompany payable	2,566			617			1,376			(4,559		)	—
Accrued compensation and contributions to retirement plans	133			121			156			—			410
Income taxes currently payable	15			1			16			—			32
Unearned revenue	259			585			479			—			1,323
Accrued legal and regulatory settlements	—			1,609			—			—			1,609
Other current liabilities	194			—			208			—			402
Total current liabilities	3,226			2,978			2,322			(4,559		)	3,967
Long-term debt	799			—			—			—			799
Intercompany loans payable	109			—			1,952			(2,061		)	—
Pension and postretirement benefits	272			—			61			—			333
Deferred income taxes	(245		)	51			250			—			56
Other non-current liabilities	219			8			40			—			267
Total liabilities	4,380			3,037			4,625			(6,620		)	5,422
Redeemable noncontrolling interest	—			—			—			810			810
Equity:
Common stock	412			—			2,316			(2,316		)	412
Additional paid-in capital	(116		)	1,153			7,016			(7,560		)	493
Retained income	6,282			(329		)	1,053			(60		)	6,946
Accumulated other comprehensive loss	(319		)	—			(236		)	41			(514		)
Less: common stock in treasury	(6,849		)	—			(7		)	7			(6,849		)
Total equity - controlling interests	(590		)	824			10,142			(9,888		)	488
Total equity - noncontrolling interests	—			—			—			51			51
Total equity	(590		)	824			10,142			(9,837		)	539
Total liabilities and equity	$	3,790		$	3,861		$	14,767		$	(15,647	)	$	6,771



	Statement of Cash Flows
	Nine Months Ended September 30, 2015
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC			Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Operating Activities:
Net income	$	1,094		$	762		$	521		$	(1,385	)	$	992
Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations:
Depreciation	29			14			21			—			64
Amortization of intangibles	—			—			40			—			40
Provision for losses on accounts receivable	—			(4		)	7			—			3
Deferred income taxes	(139		)	161			144			—			166
Stock-based compensation	16			16			23			—			55
Other	107			22			10			—			139
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	10			16			(70		)	—			(44		)
Prepaid and current assets	(35		)	22			7			—			(6		)
Accounts payable and accrued expenses	(100		)	(76		)	(10		)	—			(186		)
Unearned revenue	10			(20		)	28			—			18
Accrued legal and regulatory settlements	—			(1,624		)	—			—			(1,624		)
Other current liabilities	(19		)	(12		)	(22		)	—			(53		)
Net change in prepaid/accrued income taxes	166			—			(26		)	—			140
Net change in other assets and liabilities	91			4			(155		)	—			(60		)
Cash provided by (used for) operating activities from continuing operations	1,230			(719		)	518			(1,385		)	(356		)
Investing Activities:
Capital expenditures	(38		)	(7		)	(29		)	—			(74		)
Acquisitions, net of cash acquired	(2,241		)	—			(152		)	—			(2,393		)
Proceeds from dispositions	—			—			14			—			14
Changes in short-term investments	—			—			(3		)	—			(3		)
Cash used for investing activities from continuing operations	(2,279		)	(7		)	(170		)	—			(2,456		)
Financing Activities:
Proceeds from issuance of senior notes, net	2,674			—			—			—			2,674
Dividends paid to shareholders	(274		)	—			—			—			(274		)
Dividends and other payments paid to noncontrolling interests	—			—			(67		)	—			(67		)
Contingent consideration payment	(5		)	—			—			—			(5		)
Purchase of CRISIL shares	—			—			(16		)	—			(16		)
Repurchase of treasury shares	(501		)	—			—			—			(501		)
Exercise of stock options	76			—			1			—			77
Excess tax benefits from share-based payments	39			—			—			—			39
Intercompany financing activities	(2,192		)	727			80			1,385			—
Cash (used for) provided by financing activities from continuing operations	(183		)	727			(2		)	1,385			1,927
Effect of exchange rate changes on cash from continuing operations	(9		)	—			(33		)	—			(42		)
Cash (used for) provided by continuing operations	(1,241		)	1			313			—			(927		)
Discontinued Operations:
Cash used for operating activities	—			—			(129		)	—			(129		)
Cash used for discontinued operations	—			—			(129		)	—			(129		)
Net change in cash and cash equivalents	(1,241		)	1			184			—			(1,056		)
Cash and cash equivalents at beginning of period	1,402			—			1,095			—			2,497
Cash and cash equivalents at end of period	$	161		$	1		$	1,279		$	—		$	1,441



	Statement of Cash Flows
	Nine Months Ended September 30, 2014
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC			Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Operating Activities:
Net income	$	725		$	612		$	443		$	(972	)	$	808
Less: discontinued operations, net	15			—			—			—			15
Income from continuing operations	710			612			443			(972		)	793
Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations:
Depreciation	30			13			21			—			64
Amortization of intangibles	2			—			34			—			36
Provision for losses on accounts receivable	—			(3		)	8			—			5
Deferred income taxes	(18		)	—			(15		)	—			(33		)
Stock-based compensation	23			23			26			—			72
Other	—			85			21			—			106
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	2			67			(57		)	—			12
Prepaid and current assets	(30		)	4			18			—			(8		)
Accounts payable and accrued expenses	(153		)	(141		)	83			—			(211		)
Unearned revenue	(10		)	(14		)	31			—			7
Other current liabilities	22			(67		)	(20		)	—			(65		)
Net change in prepaid/accrued income taxes	99			3			(9		)	—			93
Net change in other assets and liabilities	14			2			(67		)	—			(51		)
Cash provided by operating activities from continuing operations	691			584			517			(972		)	820
Investing Activities:
Capital expenditures	(12		)	(11		)	(29		)	—			(52		)
Acquisitions, net of cash acquired	—			—			(65		)	—			(65		)
Proceeds from dispositions	44			—			39			—			83
Changes in short-term investments	—			—			(1		)	—			(1		)
Cash provided by (used for) investing activities from continuing operations	32			(11		)	(56		)	—			(35		)
Financing Activities:
Dividends paid to shareholders	(245		)	—			—			—			(245		)
Dividends and other payments paid to noncontrolling interests	—			—			(31		)	—			(31		)
Contingent consideration payment	—			—			(11		)	—			(11		)
Repurchase of treasury shares	(362		)	—			—			—			(362		)
Exercise of stock options	156			—			3			—			159
Excess tax benefits from share-based payments	89			—			—			—			89
Intercompany financing activities	(108		)	(573		)	(291		)	972			—
Cash used for financing activities from continuing operations	(470		)	(573		)	(330		)	972			(401		)
Effect of exchange rate changes on cash from continuing operations	(8		)	—			(16		)	—			(24		)
Cash provided by continuing operations	245			—			115			—			360
Discontinued Operations:
Cash provided by operating activities	16			—			—			—			16
Cash provided by discontinued operations	16			—			—			—			16
Net change in cash and cash equivalents	261			—			115			—			376
Cash and cash equivalents at beginning of period	685			—			857			—			1,542
Cash and cash equivalents at end of period	$	946		$	—		$	972		$	—		$	1,918