What is the "Growth and Value Plan" and its implications?

The "Growth and Value Plan" is a strategic initiative to divide The McGraw-Hill Companies into two distinct, independent publicly traded companies: McGraw-Hill Financial, which will focus on financial markets data and analytics, and McGraw-Hill Education, which will focus on educational services and digital learning. This separation aims to unlock value and improve operational focus.

What are the financial impacts of the "Growth and Value Plan"?

The company expects these changes, including workforce reductions in education and increased investment in digital learning, to yield approximately $50 million in additional annual corporate-wide cost savings. This puts the company on track to exceed its previously announced total savings target of $100 million.

What is the status of the company's share repurchase program?

The company announced the completion of its existing $1 billion share repurchase plan, having bought back 24.7 million shares in 2011. Additionally, it has entered into $500 million in accelerated share repurchase (ASR) transactions with Goldman, Sachs & Co. to further reduce the number of outstanding shares.

When will the new share repurchases under the ASR transactions be completed?

The company expects to receive a substantial majority of the shares from the $500 million ASR transactions before the end of 2011. The remaining shares are expected to be delivered by Goldman, Sachs & Co. within the first four months of 2012, though the exact completion date may vary based on specific terms and potential acceleration options.

SPGI 8-K: Leadership Changes & Regulation FD

Summary

S&P Global Inc. (formerly The McGraw-Hill Companies, Inc.) filed an 8-K on December 7, 2011, detailing significant strategic and financial actions. The company announced the election of Richard E. Thornburgh to its Board of Directors. More substantially, the company provided an update on its "Growth and Value Plan," which aims to split the company into two independent entities: McGraw-Hill Financial, focused on financial markets content and analytics, and McGraw-Hill Education, serving the education sector with a stated increased investment in digital learning and a workforce reduction of approximately 10% within education. These measures are expected to generate approximately $50 million in additional annual cost savings, exceeding the initial target. Furthermore, the company announced the completion of its $1 billion share repurchase program and initiated new accelerated share repurchase (ASR) transactions totaling $500 million. These ASRs are part of a larger 50 million share repurchase authorization. The company is paying $500 million from cash on hand, expecting to receive a majority of the shares by year-end 2011, with the remainder in early 2012. The final number of shares repurchased will be influenced by market conditions and certain contractual terms with Goldman, Sachs & Co.

Key Highlights

1Election of Richard E. Thornburgh to the Board of Directors.
2Company is proceeding with its "Growth and Value Plan" to separate into two independent companies: McGraw-Hill Financial and McGraw-Hill Education.
3McGraw-Hill Education will reduce its workforce by approximately 10% and increase investment in digital learning.
4Anticipated $50 million in additional corporate-wide annual cost savings, exceeding the initial $100 million target.
5Completion of a $1 billion share repurchase plan.
6Initiation of $500 million in new accelerated share repurchase (ASR) transactions with Goldman, Sachs & Co.
7Approximately 23 million shares remain under the existing repurchase authorization after accounting for the ASRs.

S&P Global Inc. 8-K Report, Executive Changes (Dec 7, 2011)

Summary

Key Highlights

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