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
	Year Ended December 31, 2015
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	624		$	2,141	$	2,663		$	(115	)	$	5,313
Expenses:
Operating-related expenses	73			522		1,192			(115		)	1,672
Selling and general expenses	248			469		861			—			1,578
Depreciation	40			18		32			—			90
Amortization of intangibles	—			—		67			—			67
Total expenses	361			1,009		2,152			(115		)	3,407
Other income	—			—		(11		)	—			(11		)
Operating profit	263			1,132		522			—			1,917
Interest expense (income), net	112			—		(10		)	—			102
Non-operating intercompany transactions	282			222		(504		)	—			—
(Loss) income from continuing operations before taxes on income	(131		)	910		1,036			—			1,815
(Benefit) provision for taxes on income	(107		)	358		296			—			547
Equity in net income of subsidiaries	1,473			272		—			(1,745		)	—
Net income	1,449			824		740			(1,745		)	1,268
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(112		)	(112		)
Net income attributable to McGraw Hill Financial, Inc.	$	1,449		$	824	$	740		$	(1,857	)	$	1,156
Comprehensive income	$	1,446		$	822	$	655		$	(1,741	)	$	1,182



	Statement of Income
	Year Ended December 31, 2014
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC			Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	598		$	2,043		$	2,525		$	(115	)	$	5,051
Expenses:
Operating-related expenses	78			389			1,275			(115		)	1,627
Selling and general expenses	296			2,350			522			—			3,168
Depreciation	41			17			28			—			86
Amortization of intangibles	4			—			44			—			48
Total expenses	419			2,756			1,869			(115		)	4,929
Other loss	3			—			6			—			9
Operating profit (loss)	176			(713		)	650			—			113
Interest expense (income), net	66			—			(7		)	—			59
Non-operating intercompany transactions	193			38			(231		)	—			—
(Loss) income from continuing operations before taxes on income	(83		)	(751		)	888			—			54
(Benefit) provision for taxes on income	(22		)	16			251			—			245
Equity in net (loss) income of subsidiaries	(443		)	248			—			195			—
(Loss) income from continuing operations	(504		)	(519		)	637			195			(191		)
Discontinued operations, net of tax:
Income from discontinued operations	18			—			—			—			18
Gain on sale of discontinued operations	160			—			—			—			160
Discontinued operations, net	178			—			—			—			178
Net (loss) income	$	(326	)	$	(519	)	$	637		$	195		(13		)
Less: net income from continuing operations attributable to noncontrolling interests	—			—			—			(102		)	(102		)
Net (loss) income attributable to McGraw Hill Financial, Inc.	$	(326	)	$	(519	)	$	637		$	93		$	(115	)
Comprehensive (loss) income	$	(495	)	$	(544	)	$	513		$	195		$	(331	)



	Statement of Income
	Year Ended December 31, 2013
(in millions)	McGraw Hill Financial, Inc.			Standard & Poor's Financial Services LLC		Non-Guarantor Subsidiaries			Eliminations			McGraw Hill Financial Inc. Consolidated
Revenue	$	570		$	1,931	$	2,306		$	(105	)	$	4,702
Expenses:
Operating-related expenses	128			556		985			(105		)	1,564
Selling and general expenses	338			532		761			—			1,631
Depreciation	40			19		27			—			86
Amortization of intangibles	5			—		46			—			51
Total expenses	511			1,107		1,819			(105		)	3,332
Other loss (income)	25			3		(16		)	—			12
Operating profit	34			821		503			—			1,358
Interest expense (income), net	65			—		(6		)	—			59
Non-operating intercompany transactions	245			66		(311		)	—			—
Income from continuing operations before taxes on income	(276		)	755		820			—			1,299
(Benefit) provision for taxes on income	(121		)	283		263			—			425
Equity in net income of subsidiaries	1,937			197		—			(2,134		)	—
Income from continuing operations	1,782			669		557			(2,134		)	874
Discontinued operations, net of tax:
Income (loss) from discontinued operations	82			—		(79		)	—			3
Gain (loss) on sale of discontinued operations	644			—		(55		)	—			589
Discontinued operations, net	726			—		(134		)	—			592
Net income	$	2,508		$	669	$	423		$	(2,134	)	$	1,466
Less: net income from continuing operations attributable to noncontrolling interests	—			—		—			(91		)	(91		)
Less: net loss from discontinued operations attributable to noncontrolling interests	—			—		—			1			1
Net income attributable to McGraw Hill Financial, Inc.	$	2,508		$	669	$	423		$	(2,224	)	$	1,376
Comprehensive income	$	2,773		$	669	$	452		$	(2,106	)	$	1,788



	Balance Sheet
	December 31, 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	$	167		$	—		$	1,314		$	—		$	1,481
Accounts receivable, net of allowance for doubtful accounts	116			319			556			—			991
Intercompany receivable	208			1,872			1,273			(3,353		)	—
Deferred income taxes	75			10			24			—			109
Prepaid and other current assets	120			13			80			(1		)	212
Assets of a business held for sale	4			—			499			—			503
Total current assets	690			2,214			3,746			(3,354		)	3,296
Property and equipment, net of accumulated depreciation	141			3			126			—			270
Goodwill	17			40			2,816			9			2,882
Other intangible assets, net	—			—			1,522			—			1,522
Asset for pension benefits	—			—			36			—			36
Investments in subsidiaries	4,651			659			7,316			(12,626		)	—
Intercompany loans receivable	16			368			1,733			(2,117		)	—
Other non-current assets	67			19			91			—			177
Total assets	$	5,582		$	3,303		$	17,386		$	(18,088	)	$	8,183
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	71		$	54		$	81		$	—		$	206
Intercompany payable	2,144			675			535			(3,354		)	—
Accrued compensation and contributions to retirement plans	127			89			167			—			383
Short-term debt	143			—			—			—			143
Income taxes currently payable	1			—			55			—			56
Unearned revenue	254			586			582			(1		)	1,421
Accrued legal and regulatory settlements	—			115			6			—			121
Other current liabilities	190			(50		)	232			—			372
Liabilities of a business held for sale	80			—			126			—			206
Total current liabilities	3,010			1,469			1,784			(3,355		)	2,908
Long-term debt	3,468			—			—			—			3,468
Intercompany loans payable	21			—			2,096			(2,117		)	—
Pension and other postretirement benefits	230			—			46			—			276
Deferred income taxes	(246		)	17			252			—			23
Other non-current liabilities	221			81			43			—			345
Total liabilities	6,704			1,567			4,221			(5,472		)	7,020
Redeemable noncontrolling interest	—			—			—			920			920
Equity:
Common stock	412			—			2,337			(2,337		)	412
Additional paid-in capital	(184		)	1,179			10,174			(10,694		)	475
Retained income	6,701			557			987			(609		)	7,636
Accumulated other comprehensive loss	(322		)	—			(322		)	44			(600		)
Less: common stock in treasury	(7,729		)	—			(12		)	12			(7,729		)
Total equity - controlling interests	(1,122		)	1,736			13,164			(13,584		)	194
Total equity - noncontrolling interests	—			—			1			48			49
Total equity	(1,122		)	1,736			13,165			(13,536		)	243
Total liabilities and equity	$	5,582		$	3,303		$	17,386		$	(18,088	)	$	8,183



	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	60			334			(34		)	—			360
Prepaid and other current assets	79			27			67			—			173
Total current assets	2,186			2,779			3,645			(4,648		)	3,962
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	20			358			1,594			(1,972		)	—
Other non-current assets	71			25			90			—			186
Total assets	$	3,768		$	3,861		$	14,791		$	(15,647	)	$	6,773
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	19			1			34			—			54
Unearned revenue	259			520			475			—			1,254
Accrued legal and regulatory settlements	—			1,609			—			—			1,609
Other current liabilities	194			—			208			—			402
Total current liabilities	3,230			2,913			2,336			(4,559		)	3,920
Long-term debt	795			—			—			—			795
Intercompany loans payable	109			—			1,952			(2,061		)	—
Pension and other postretirement benefits	272			—			61			—			333
Deferred income taxes	(260		)	51			249			—			40
Other non-current liabilities	219			73			44			—			336
Total liabilities	4,365			3,037			4,642			(6,620		)	5,424
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	6,275			(329		)	1,060			(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	(597		)	824			10,149			(9,888		)	488
Total equity - noncontrolling interests	—			—			—			51			51
Total equity	(597		)	824			10,149			(9,837		)	539
Total liabilities and equity	$	3,768		$	3,861		$	14,791		$	(15,647	)	$	6,773



	Statement of Cash Flows
	Year Ended December 31, 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	$	1,449		$	824		$	740		$	(1,745	)	$	1,268
Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations:
Depreciation	40			18			32			—			90
Amortization of intangibles	—			—			67			—			67
Provision for losses on accounts receivable	1			1			6			—			8
Deferred income taxes	33			290			(43		)	—			280
Stock-based compensation	23			24			31			—			78
Accrued legal and regulatory settlements	—			110			9			—			119
Other	23			16			7			—			46
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	3			(27		)	(94		)	—			(118		)
Prepaid and current assets	(13		)	14			(5		)	—			(4		)
Accounts payable and accrued expenses	(75		)	(34		)	17			—			(92		)
Unearned revenue	(5		)	66			68			—			129
Accrued legal and regulatory settlement	—			(1,624		)	—			—			(1,624		)
Other current liabilities	(32		)	(35		)	(11		)	—			(78		)
Net change in prepaid/accrued income taxes	(54		)	—			115			—			61
Net change in other assets and liabilities	78			8			(121		)	—			(35		)
Cash provided by (used for) operating activities from continuing operations	1,471			(349		)	818			(1,745		)	195
Investing Activities:
Capital expenditures	(67		)	(10		)	(62		)	—			(139		)
Acquisitions, net of cash acquired	(2,243		)	—			(153		)	—			(2,396		)
Proceeds from dispositions	—			—			14			—			14
Changes in short-term investments	—			—			(4		)	—			(4		)
Cash used for investing activities from continuing operations	(2,310		)	(10		)	(205		)	—			(2,525		)
Financing Activities:
Additions to short-term debt, net	143			—			—			—			143
Proceeds from issuance of senior notes, net	2,674			—			—			—			2,674
Dividends paid to shareholders	(363		)	—			—			—			(363		)
Dividends and other payments paid to noncontrolling interests	—			—			(104		)	—			(104		)
Repurchase of treasury shares	(974		)	—			—			—			(974		)
Exercise of stock options	80			—			6			—			86
Contingent payments	(5		)	—			—			—			(5		)
Purchase of additional CRISIL shares	—			—			(16		)	—			(16		)
Excess tax benefits from share-based payments	69			—			—			—			69
Intercompany financing activities	(2,020		)	359			(84		)	1,745			—
Cash (used for) provided by financing activities from continuing operations	(396		)	359			(198		)	1,745			1,510
Effect of exchange rate changes on cash from continuing operations	—			—			(67		)	—			(67		)
Cash (used for) provided by continuing operations	(1,235		)	—			348			—			(887		)
Discontinued Operations:
Cash used for operating activities	—			—			(129		)	—			(129		)
Cash used for discontinued operations	—			—			(129		)	—			(129		)
Net change in cash and cash equivalents	(1,235		)	—			219			—			(1,016		)
Cash and cash equivalents at beginning of year	1,402			—			1,095			—			2,497
Cash and cash equivalents at end of year	$	167		$	—		$	1,314		$	—		$	1,481



	Statement of Cash Flows
	Year Ended December 31, 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 (loss) income	$	(326	)	$	(519	)	$	637		$	195		$	(13	)
Less: discontinued operations, net	178			—			—			—			178
(Loss) income from continuing operations	(504		)	(519		)	637			195			(191		)
Adjustments to reconcile (loss) income from continuing operations to cash (used for) provided by operating activities from continuing operations:
Depreciation	41			17			28			—			86
Amortization of intangibles	4			—			44			—			48
Provision for losses on accounts receivable	—			5			6			—			11
Deferred income taxes	42			(272		)	(15		)	—			(245		)
Stock-based compensation	31			34			35			—			100
Accrued legal and regulatory settlements	—			1,587			—			—			1,587
Other	21			39			20			—			80
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(11		)	47			(45		)	—			(9		)
Prepaid and current assets	(42		)	(17		)	52			—			(7		)
Accounts payable and accrued expenses	(83		)	(47		)	—			—			(130		)
Unearned revenue	8			26			44			—			78
Accrued legal and regulatory settlement	—			(35		)	—			—			(35		)
Other current liabilities	(51		)	45			(10		)	—			(16		)
Net change in prepaid/accrued income taxes	13			3			(109		)	—			(93		)
Net change in other assets and liabilities	(131		)	5			71			—			(55		)
Cash (used for) provided by operating activities from continuing operations	(662		)	918			758			195			1,209
Investing Activities:
Capital expenditures	(26		)	(14		)	(52		)	—			(92		)
Acquisitions, net of cash acquired	—			—			(71		)	—			(71		)
Proceeds from dispositions	63			—			20			—			83
Changes in short-term investments	—			—			15			—			15
Cash provided by (used for) investing activities from continuing operations	37			(14		)	(88		)	—			(65		)
Financing Activities:
Dividends paid to shareholders	(326		)	—			—			—			(326		)
Dividends and other payments paid to noncontrolling interests	—			—			(84		)	—			(84		)
Repurchase of treasury shares	(362		)	—			—			—			(362		)
Exercise of stock options	184			—			9			—			193
Contingent payments	—			—			(11		)	—			(11		)
Excess tax benefits from share-based payments	128			—			—			—			128
Intercompany financing activities	1,377			(904		)	(278		)	(195		)	—
Cash provided by (used for) financing activities from continuing operations	1,001			(904		)	(364		)	(195		)	(462		)
Effect of exchange rate changes on cash from continuing operations	3			—			(68		)	—			(65		)
Cash provided by continuing operations	379			—			238			—			617
Discontinued Operations:
Cash provided by operating activities	18			—			—			—			18
Cash provided by investing activities	320			—			—			—			320
Cash provided by discontinued operations	338			—			—			—			338
Net change in cash and cash equivalents	717			—			238			—			955
Cash and cash equivalents at beginning of year	685			—			857			—			1,542
Cash and cash equivalents at end of year	$	1,402		$	—		$	1,095		$	—		$	2,497



	Statement of Cash Flows
	Year Ended December 31, 2013
(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	$	2,508		$	669		$	423		$	(2,134	)	$	1,466
Less: discontinued operations, net	726			—			(134		)	—			592
Income from continuing operations	1,782			669			557			(2,134		)	874
Adjustments to reconcile income from continuing operations to cash provided by (used for) operating activities from continuing operations:
Depreciation	40			19			27			—			86
Amortization of intangibles	5			—			46			—			51
Provision for losses on accounts receivable	1			7			14			—			22
Deferred income taxes	39			—			4			—			43
Stock-based compensation	35			33			28			—			96
Accrued legal and regulatory settlements	—			—			—			—			—
Other	68			10			18			—			96
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(2		)	(4		)	(29		)	—			(35		)
Prepaid and current assets	(14		)	(7		)	(8		)	—			(29		)
Accounts payable and accrued expenses	(120		)	18			8			—			(94		)
Unearned revenue	17			43			49			—			109
Other current liabilities	(43		)	(24		)	(22		)	—			(89		)
Net change in prepaid/accrued income taxes	(265		)	(3		)	30			—			(238		)
Net change in other assets and liabilities	(190		)	84			(4		)	—			(110		)
Cash provided by operating activities from continuing operations	1,353			845			718			(2,134		)	782
Investing Activities:
Capital expenditures	(61		)	(19		)	(37		)	—			(117		)
Acquisitions, net of cash acquired	—			—			(47		)	—			(47		)
Proceeds from dispositions	35			—			16			—			51
Changes in short-term investments	—			—			(17		)	—			(17		)
Cash used for investing activities from continuing operations	(26		)	(19		)	(85		)	—			(130		)
Financing Activities:
Payments on short-term debt	(457		)	—			—			—			(457		)
Dividends paid to shareholders	(308		)	—			—			—			(308		)
Dividends and other payments paid to noncontrolling interests	—			—			(75		)	—			(75		)
Repurchase of treasury shares	(978		)	—			—			—			(978		)
Exercise of stock options	254			—			4			—			258
Contingent payments	—			—			(12		)	—			(12		)
Purchase of additional CRISIL shares	—			—			(214		)	—			(214		)
Excess tax benefits from share-based payments	43			—			—			—			43
Intercompany financing activities	(43		)	(826		)	(1,265		)	2,134			—
Cash used for financing activities from continuing operations	(1,489		)	(826		)	(1,562		)	2,134			(1,743		)
Effect of exchange rate changes on cash from continuing operations	8			—			(9		)	—			(1		)
Cash used for continuing operations	(154		)	—			(938		)	—			(1,092		)
Discontinued Operations:
Cash provided by (used for) operating activities	720			—			(951		)	—			(231		)
Cash provided by investing activities	—			—			2,129			—			2,129
Cash used for financing activities	—			—			(25		)	—			(25		)
Effect of exchange rate changes on cash	—			—			1			—			1
Cash provided by discontinued operations	720			—			1,154			—			1,874
Net change in cash and cash equivalents	566			—			216			—			782
Cash and cash equivalents at beginning of year	119			—			641			—			760
Cash and cash equivalents at end of year	$	685		$	—		$	857		$	—		$	1,542