標普全球 (SPGI) 2012 Q2 法說會逐字稿

Good morning and welcome to The McGraw-Hill Companies conference call. I would like to inform you that this call is being recorded for broadcast and that all participants are on a listen-only mode. We will open the conference to question-and-answers after the presentation and instructions will follow at that time. (Operator Instructions).

早安，歡迎參加麥格羅-希爾公司（The McGraw-Hill Companies）電話會議。我想提醒各位，本次通話將被錄音以供播出，且所有與會者目前皆處於僅收聽模式。在簡報結束後，我們將開放問答環節，屆時將提供相關操作說明。（接線員指示）。

I would now like to introduce Mr. Chip Merritt, Vice President of Investor Relations for The McGraw-Hill Companies. Sir, you may begin.

現在我想介紹麥格羅-希爾公司投資人關係副總裁 Chip Merritt 先生。先生，您可以開始了。

Good morning. We thank you for joining us this morning at The McGraw-Hill Companies second-quarter 2012 earnings call. I'm Chip Merritt, Vice President of Investor Relations.

早安。感謝各位今天早上參加麥格羅-希爾公司 2012 年第二季財報電話會議。我是 Chip Merritt，投資人關係副總裁。

This morning we issued a news release with our results. We trust you have all had a chance to review the release. If you need a copy of the release and financial schedules, they can be downloaded at www.McGraw-Hill.com. Once again, that is www.McGraw-Hill.com.

今天早上我們已發布新聞稿公布本公司業績。相信各位都已經有機會閱讀該新聞稿。若您需要新聞稿與財務附表，可至 www.McGraw-Hill.com 下載。再重申一次，網址是 www.McGraw-Hill.com。

In today's earnings release and during the conference call, we are providing adjusted financial information. This information is provided to enable investors to make meaningful comparisons of the corporation's operating performance between periods and to view the corporation's business from the same perspective as management's. The earnings release contains exhibits that reconcile the difference between the non-GAAP measures and the comparable financial measures calculated in accordance with US GAAP. The results of the prior-year quarter also reflect the reclassification of the broadcasting group as a discontinued operation.

在今天的財報新聞稿以及本次電話會議中，我們將提供經調整的財務資訊。提供此資訊是為了讓投資人能在不同期間之間對本公司營運表現進行有意義的比較，並以與管理階層相同的角度來檢視本公司業務。財報新聞稿包含附表，用以調節非 GAAP 指標與依照美國 GAAP 計算之可比財務指標之間的差異。前一年度同季的結果亦反映將廣播事業群重新分類為停業單位。

Before we begin, I need to provide certain cautionary remarks about forward-looking statements. Except for historical information, the matters discussed in the teleconference may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including projections, estimates, and descriptions of future events. Any such statements are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements.

在開始之前，我需要就前瞻性陳述提供若干警示性說明。除歷史資訊外，本次電話會議所討論事項可能包含《1995 年私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）所定義之前瞻性陳述，包括預測、估計及對未來事件的描述。任何此類陳述均基於目前預期與當前經濟狀況，並受各項風險與不確定性影響，可能導致實際結果與這些前瞻性陳述所預期的結果出現重大差異。

In this regard, we direct listeners to the cautionary statements contained in our Form 10-Ks, 10-Qs, and other periodic reports filed with the US Securities and Exchange Commission.

就此，我們提醒聽眾參閱本公司向美國證券交易委員會（SEC）提交之 Form 10-K、10-Q 及其他定期報告中所載的警示性聲明。

We are aware that we do have some media representatives with us on the call today. However, this call is intended for investors. We would ask that questions from the media be directed to Patti Rockenwagner in our New York office at 212-512-3533 subsequent to this call.

我們知道今天的電話會議中也有一些媒體代表與會。然而，本次電話會議主要是為投資人而設。我們請媒體的提問在本次會議結束後，致電我們紐約辦公室的 Patti Rockenwagner，電話為 212-512-3533。

Now, I would like to turn the call over to Harold McGraw III, Chairman, President and CEO of McGraw-Hill Companies. Terry?

現在，我想把電話交給麥格羅-希爾公司董事長、總裁暨執行長 Harold McGraw III。Terry？

It okay. Thank you very much, Chip, and good morning, everyone. Welcome to today's conference call. Joining me today on the conference call is Jack Callahan, our Chief Financial Officer. This morning, Jack and I will review our corporate results, provide an update on our Growth and Value Plan progress, provide a detailed look at the segment results that make up what will be McGraw-Hill Financial and McGraw-Hill Education, and then provide an outlook for the balance of the year.

可以。非常感謝你，Chip，各位早安。歡迎參加今天的電話會議。今天與我一同參與電話會議的還有我們的財務長 Jack Callahan。今天早上，Jack 和我將回顧公司整體業績，更新我們「成長與價值計畫」（Growth and Value Plan）的進展，詳細說明將構成未來 McGraw-Hill Financial 與 McGraw-Hill Education 的各事業部門業績，並提供今年剩餘期間的展望。

Three months ago, I was able to share record first-quarter earnings. I couldn't be more pleased today to share with you our record second-quarter earnings. What makes these results particularly noteworthy is that they occurred during a period of tremendous volatility in the debt markets as a result of European debt crisis and in a year in which we are experiencing the weakest state funding for textbooks in the past decade. To say the least, our employees are to be commended for delivering these results in today's very challenging global economic environment while simultaneously advancing the separation and implementing major cost reduction programs.

三個月前，我得以與各位分享創紀錄的第一季獲利。今天我更高興與各位分享我們創紀錄的第二季獲利。這些成果之所以特別值得注意，是因為它們發生在債務市場因歐洲債務危機而劇烈波動的期間，同時也是我們在過去十年中遭遇教科書州政府資金最疲弱的一年。至少可以說，我們的員工值得嘉許：在當今極具挑戰的全球經濟環境下，他們一方面交出這樣的成績，另一方面也同步推進分拆計畫並落實重大成本削減方案。

During the second quarter, despite revenue that was modestly below a year ago, we delivered adjusted operating profit growth of 14% from both increased revenue in Commodities & Commercial, S&P Capital IQ, S&P Indices as well as an acceleration of cost reductions that were realized during the quarter.

第二季期間，儘管營收較去年同期略低，我們仍交出經調整營業利益成長 14% 的表現，主要來自 Commodities & Commercial、S&P Capital IQ、S&P Indices 的營收增加，以及本季加速實現的成本削減效益。

Our recent aggressive share repurchase program amplified this growth and we delivered 25% adjusted diluted earnings per share growth and Jack will provide additional detail on that in just a moment.

我們近期積極的庫藏股回購計畫進一步放大了這項成長，使我們的經調整稀釋每股盈餘成長 25%；Jack 稍後將就此提供更多細節。

The primary focus of the Company remains on delivering on the Growth and Value Plan. As part of this effort, we continue to progress toward the creation of two powerful new companies, one, McGraw-Hill Education, and the other, McGraw-Hill Financial, and doing so in 2012.

公司目前的首要重點仍是落實「成長與價值計畫」。作為此項努力的一部分，我們持續推進在 2012 年成立兩家強而有力的新公司：其一為 McGraw-Hill Education，其二為 McGraw-Hill Financial。

Steady progress has been made on the Growth and Value Plan during the second quarter. Key management has been put in place at McGraw-Hill Education and that includes Buzz Waterhouse as President and CEO, and Pat Milano as CFO and Chief Administrative Officer. Buzz brings a wealth of both technology and education experience while Pat brings the financial expertise coupled with a deep knowledge McGraw-Hill given has long tenure. Both are terrific leaders and I can't say enough about them and the team that we put in place.

第二季期間，「成長與價值計畫」持續穩健推進。McGraw-Hill Education 的關鍵管理團隊已到位，包括由 Buzz Waterhouse 擔任總裁暨執行長，以及 Pat Milano 擔任財務長暨行政長。Buzz 擁有豐富的科技與教育經驗；Pat 則具備財務專業，並因長期任職而對麥格羅-希爾有深厚了解。兩位都是傑出的領導者，對他們以及我們所建立的團隊，我再怎麼稱讚都不為過。

The Form 10 Registration Statement was filed with the SEC several weeks ago. Consolidated cost reductions accelerated in the second quarter with total Company adjusted expenses decreasing 5% versus the second quarter of 2011 resulting in an increase in margins. These cost reduction actions and others currently underway keep us on track to delivering at least $100 million in cost savings on a run rate basis by year end.

Form 10 註冊聲明已於數週前向 SEC 提交。第二季合併成本削減加速推進，公司整體經調整費用較 2011 年第二季下降 5%，帶動利潤率提升。這些成本削減措施以及目前正在進行的其他行動，使我們仍按計畫在年底前以年化（run rate）基礎達成至少 1 億美元的成本節省。

Also, as part of the Growth and Value Plan, we are working on more than just cost reduction and separations, strategic investments are an important component and we made several during the quarter to accelerate long-term growth. We launched the S&P/Dow Jones Indices, combining two iconic brands that will continue to deliver index based solutions for global investors. It is a very exciting joint venture with a wonderful partner in the CME and should deliver annual revenues in 2013 in its first full year of approximately $0.5 billion with great margins.

此外，作為「成長與價值計畫」的一部分，我們不僅著眼於成本削減與分拆；策略性投資也是重要組成，我們在本季進行了數項投資以加速長期成長。我們推出 S&P/Dow Jones Indices，結合兩個指標性品牌，將持續為全球投資人提供以指數為基礎的解決方案。這是一項令人振奮的合資事業，我們與 CME 這位優秀夥伴合作，預期在 2013 年（其第一個完整年度）可帶來約 5 億美元的年營收，且具備優異的利潤率。

Since the deal closed in late June, the impact on the second-quarter earnings was minimal.

由於交易在 6 月下旬才完成交割，對第二季獲利的影響不大。

We acquired Credit Market Analysis Limited, or CMA, a leading provider of clear, reliable, over-the-counter credit pricing and related information from the CME. This adds another foundational benchmark capability to our portfolio. The business will be reported within S&P Capital IQ.

我們自 CME 收購 Credit Market Analysis Limited（CMA），其為場外（over-the-counter）信用定價及相關資訊的領先供應商，提供清晰、可靠的資料。此舉為我們的產品組合增添另一項基礎性的基準能力。該業務將納入 S&P Capital IQ 之內報導。

Our India-based credit rating agency, CRISIL, announced the acquisition of Coalition Development Limited. Coalition provides high-end analytics primarily to global investment banks. It is a London-based company with considerable operations in India.

我們位於印度的信用評等機構 CRISIL 宣布收購 Coalition Development Limited。Coalition 主要為全球投資銀行提供高階分析服務。該公司總部位於倫敦，並在印度擁有相當規模的營運。

From a corporate development standpoint, we have been very active in adding new capabilities to the Company, along with S&P/Dow Jones Indices, CMA and Coalition, which I just discussed, we had acquisitions of R2 and QuantHouse earlier this year, both in S&P Capital IQ.

從公司發展的角度來看，我們在為公司增添新能力方面一直非常積極；除了我剛才提到的 S&P/Dow Jones Indices、CMA 與 Coalition 之外，我們今年稍早也收購了 R2 與 QuantHouse，兩者皆隸屬於 S&P Capital IQ。

Overall, the Growth and Value Plan is a comprehensive set of integrated initiatives which include separation, cost reduction, share repurchases as well as funding both organic growth and tuck-in acquisitions. I am pleased with the progress so far this year and I'm excited about the prospects for the future of both companies as we complete this process.

整體而言，「成長與價值計畫」是一套全面且相互整合的倡議組合，內容包括分拆、成本削減、股票回購，以及同時為有機成長與補強型（tuck-in）併購提供資金。我對今年迄今的進展感到滿意，並且在我們完成此流程之際，對兩家公司未來的前景感到振奮。

With that, let me turn to the business results and I will go through each of the various business areas. Let me start, McGraw-Hill Financial on a pro forma basis delivered a 5% increase in revenue and a 9% increase in adjusted operating profit during the quarter. While all three segments delivered revenue growth, it was S&P Capital IQ and S&P Indices, along with Commodities & Commercial that provided the operating profit growth. Cost reduction benefits were realized across all segments.

接下來，讓我轉到業務成果，我將逐一說明各個業務領域。先從 McGraw-Hill Financial 開始，以擬制（pro forma）基礎計算，本季營收成長 5%，調整後營業利益成長 9%。雖然三個事業部門皆實現營收成長，但帶動營業利益成長的是 S&P Capital IQ 與 S&P Indices，以及 Commodities & Commercial。各事業部門均已實現成本削減效益。

McGraw-Hill Financial derived 40% of its revenues from outside the United States during the second quarter. Domestic revenue growth of 7% outpaced International growth of 3% which was impacted by volatile conditions in Europe and adverse foreign exchange rates.

McGraw-Hill Financial 在第二季有 40% 的營收來自美國以外地區。國內營收成長 7% 高於國際成長 3%；國際成長受到歐洲市場波動以及不利匯率影響。

Standard & Poor's Ratings continues to be the segment with the largest international presence in terms of dollars with 46% of revenue coming from outside the United States. Standard & Poor's Ratings is the largest business segment within McGraw-Hill Financial. Revenue for the segment grew 1% with a 7% increase in domestic revenue and a 6% decrease in International revenue. Nearly all of the decrease in International revenue was the result of foreign exchange rates. However, these rate changes had a negligible impact on operating profit.

以金額計，Standard & Poor's Ratings 仍是國際布局最廣的事業部門，46% 的營收來自美國以外地區。Standard & Poor's Ratings 是 McGraw-Hill Financial 旗下最大的業務部門。該部門營收成長 1%，其中國內營收成長 7%，國際營收下降 6%。國際營收下降幾乎全部源自匯率因素。然而，這些匯率變動對營業利益的影響可忽略不計。

Excluding the impact of foreign exchange rates, total revenue for this segment would have increased 3%. The operating margin was down year-over-year but improved versus the first quarter.

若排除匯率影響，該部門總營收本可成長 3%。營業利益率較去年同期下降，但較第一季有所改善。

Transaction revenue increased 4% to $203 million. The key drivers to the increase in transaction revenue were the US public finance issuance which increased 58%. You may recall that the muni market was adversely impacted back in the second quarter of 2011 by the perceived risk of a wave of muni defaults which did not come to fruition.

交易型營收成長 4%，至 2.03 億美元。交易型營收成長的主要驅動因素為美國公共融資（public finance）發行量增加 58%。各位或許記得，2011 年第二季市政債（muni）市場曾因外界認為可能出現一波市政債違約潮而受到不利影響，但該情況並未發生。

The US structured finance issuance which increased 22% due to the growth in asset-backed securities and also CLOs, collateralized loan obligations. It is certainly encouraging to see the growth in Structured Products and we look for that to continue.

美國結構性融資發行量增加 22%，主要受資產擔保證券（asset-backed securities）以及 CLO（collateralized loan obligations，擔保貸款憑證）成長帶動。看到結構性產品的成長確實令人鼓舞，我們預期此趨勢將持續。

US corporate investment-grade issuance which remained resilient had increased 7%. Offsetting this growth was US corporate speculative grade issuance which decreased 39% as investments became more risk-averse, European corporate issuance which decreased 36% and European structured finance issuance which decreased 60%.

美國投資等級公司債發行量維持韌性，成長 7%。抵銷上述成長的因素包括：美國投機等級公司債發行量下降 39%（因投資趨於避險）、歐洲公司債發行量下降 36%，以及歐洲結構性融資發行量下降 60%。

Non-transaction revenue, which represents 58% of second-quarter revenue decreased 2% primarily due to the strengthening US dollar. Excluding the impact of foreign exchange rates, non-transaction revenue increased 2%.

非交易型營收占第二季營收的 58%，下降 2%，主要因美元走強所致。若排除匯率影響，非交易型營收成長 2%。

It is becoming increasingly apparent that global debt issuance trends are diverging. While trends in the United States are increasingly encouraging, the picture in Europe continues to be quite volatile. With the exception of strong issuance in January and February as a result of the injection of liquidity into the Eurozone banking system by the ECB, issuance activity has been rather subdued. However, over the long term, Ratings business outlook appears very encouraging with numerous secular drivers of growth including a large pipeline of maturing global corporate debt that will need to be refinanced, the shift in Europe from bank loans to public debt markets as banks face new regulations as well as capital requirements.

全球債務發行趨勢正日益明顯地出現分歧。美國的趨勢愈發令人鼓舞，但歐洲的情勢仍相當波動。除了一月與二月因歐洲央行（ECB）向歐元區銀行體系注入流動性而帶來強勁發行外，整體發行活動相對低迷。然而，從長期來看，評級業務的展望仍相當正面，存在多項結構性成長驅動因素，包括：大量即將到期的全球公司債需再融資；以及在銀行面臨新監管與資本要求之下，歐洲融資從銀行貸款轉向公開債務市場。

And finally, the structured finance market, which should recover with improved activity in the residential and commercial real estate markets. However, there are a number of issues that continue to create considerable volatility and these include the European financial crisis, risk aversion among some investors, sovereign debt levels, and pending government regulations, which create uncertainty.

最後，結構性融資市場應可隨著住宅與商用不動產市場活動改善而復甦。然而，仍有多項議題持續造成顯著波動，包括歐洲金融危機、部分投資人風險趨避、主權債務水準，以及尚待公布的政府監管規定所帶來的不確定性。

Our success on the litigation front has been encouraging. The trends that we have discussed in the past quarterly conference calls continue. Two additional cases were dismissed in the second quarter bringing the total dismissed to date at 29 cases. Seven dismissals by lower courts have been affirmed by higher courts and 10 cases have been voluntarily withdrawn.

我們在訴訟方面的進展令人鼓舞。我們在過去幾次季度電話會議中討論的趨勢仍在延續。第二季又有兩起案件遭到駁回，使得迄今累計駁回案件達 29 起。下級法院的 7 項駁回判決已獲上級法院維持，另有 10 起案件已自願撤回。

Among the dismissals was the Oddo litigation which was affirmed by the highest court in New York. Several dozen cases remain outstanding. We continue to believe that the legal risk of pending litigation remains low.

在遭駁回的案件中，包括 Oddo 訴訟案，且已獲紐約州最高法院確認。仍有數十起案件尚未結案。我們仍認為未決訴訟的法律風險維持在低水準。

On the regulatory and government front, the Ratings business remains an area of focus for regulators both in the United States and Europe. There are three principal items that we are monitoring. The first is CRA 3 in Europe. That remains -- there remains the possibility of a mandatory rotation of the rating agencies for structured finance products or a subset of these products. There is also a proposal for a new EU wide liability standard enabling investors who purchase investments to sue a credit rating agency that breaches the EU regulations intentionally or through gross negligence.

在監管與政府層面，評級業務仍是美國與歐洲監管機關的關注焦點。我們正在監測三項主要議題。第一項是歐洲的 CRA 3。目前仍存在一種可能性：對結構性融資產品或其中一部分產品，強制要求評級機構輪替。另有一項提案，擬建立全歐盟一致的新的責任標準，使購買投資的投資人得以在信用評級機構故意或重大過失違反歐盟法規時提起訴訟。

Next is a Dodd-Frank, which requires all US regulations be changed to remove any reference to or requirement of reliance on credit ratings.

其次是《多德—法蘭克法案》（Dodd-Frank），其要求所有美國法規必須修改，以移除任何對信用評級的引用或依賴要求。

Last is the Franken amendment, which is being studied by the SEC. This amendment recommends establishing an organization to assign which NRSRO will provide the initial rating on each new structured finance product.

最後是「Franken 修正案」，目前正由美國證券交易委員會（SEC）研究。該修正案建議成立一個組織，負責指派由哪一家 NRSRO 為每一項新的結構性融資產品提供初始評級。

As new regulations are considered in the global markets that we serve, we will continue to provide investors with high-quality, forward-looking opinions about credit worthiness.

隨著我們所服務的全球市場正在研議新法規，我們將持續為投資人提供高品質、具前瞻性的信用價值判斷意見。

In addition, the Civil Division of the Department of Justice and the Division of Enforcement of the Securities and Exchange Commission are investigating potential violation of civil provisions of federal law regarding and relating to S&P's Ratings of structured products. Of course, we have been in discussions with representatives of both the DOJ and the SEC and presenting our position on those issues.

此外，司法部（DOJ）民事司以及美國證券交易委員會（SEC）執法部門，正在就與 S&P 對結構性產品之評級相關、可能違反聯邦法律民事條款的情事進行調查。當然，我們一直與 DOJ 與 SEC 的代表進行討論，並就相關議題陳述我們的立場。

The Ratings segment is now past its toughest revenue comparisons of the year, although we have a difficult expense comparison ahead of us in the third quarter especially with exchange rates issues. With the investments that we have made in the business, along with our repositioning of our commercial mortgage-backed securities offering, we continue to work towards improved performance of this very, very important business.

評級事業部門目前已度過本年度最艱難的營收比較期，儘管第三季在費用比較上仍將面臨挑戰，尤其是匯率相關問題。憑藉我們對該業務所做的投資，以及我們對商用不動產抵押貸款證券（CMBS）產品的重新定位，我們將持續努力提升這項極其重要業務的表現。

Okay. With that, let me now turn to S&P Capital IQ and S&P Indices, the second-largest segment within McGraw-Hill Financial. It delivered solid top and bottom line results with revenue and adjusted operating profit increasing 10% and 17% respectively. Both S&P Capital IQ and S&P Indices delivered year-over-year revenue growth with 74% of revenue coming from subscriptions, the same as a year ago.

好的。接下來，讓我轉到 S&P Capital IQ 與 S&P Indices，這是 McGraw-Hill Financial 旗下第二大事業部門。該部門在營收與獲利兩端均交出穩健成果，營收與調整後營業利益分別成長 10% 與 17%。S&P Capital IQ 與 S&P Indices 皆實現年對年營收成長，其中 74% 的營收來自訂閱制，與一年前相同。

Looking at S&P Capital IQ alone, revenue increased 9%. A key driver of this growth was double-digit growth in S&P Capital IQ subscriptions with solid growth at both Desktop Solutions as well as Enterprise Solutions. In addition, both RatingsXpress and Global Credit Portal contributed to the growth.

單看 S&P Capital IQ，營收成長 9%。此成長的關鍵驅動因素是 S&P Capital IQ 訂閱收入的兩位數成長，Desktop Solutions 與 Enterprise Solutions 皆有穩健成長。此外，RatingsXpress 與 Global Credit Portal 也對成長有所貢獻。

And as I mentioned earlier during the quarter, we acquired Credit Market Analysis, or CMA, and with CMA we significantly expanded our asset class coverage for data and pricing and added technology to move into live intraday coverage of derivatives and other over-the-counter securities.

正如我先前在本季提到的，我們收購了 Credit Market Analysis（或 CMA），並藉由 CMA 大幅擴展了我們在資料與定價方面的資產類別覆蓋範圍，同時新增技術能力，得以進入衍生性商品及其他場外（OTC）證券的即時盤中覆蓋。

We are continuously working to upgrade the S&P Capital IQ platform and there have been a number of new products and capabilities that have been launched recently. One that I would like to touch on briefly is in the area of counterparty risk. We have expanded the capabilities for measuring counterparty risk in the S&P Capital IQ platform. S&P Capital IQ Credit analytics offers new capabilities for clients to produce even more dynamic risk measures to support their counterparty analysis. With new and enhanced features for Credit Model, Credit Pro and Credit Risk Tracker products, clients can stay on top of market movements in the credit risk space quickly and efficiently.

我們持續致力於升級 S&P Capital IQ 平台，近期也推出了多項新產品與新功能。我想簡要提及其中一項：交易對手風險領域。我們已擴充 S&P Capital IQ 平台衡量交易對手風險的能力。S&P Capital IQ 信用分析為客戶提供新功能，使其能產出更具動態性的風險衡量指標，以支援其交易對手分析。透過 Credit Model、Credit Pro 與 Credit Risk Tracker 產品新增與強化的功能，客戶能更快速且有效率地掌握信用風險領域的市場變動。

And lastly, the integration of our recent acquisitions of R2 and QuantHouse are progressing well. We have effectively empowered R2 and QuantHouse to lead our efforts in the development of next-generation cross asset class portfolio analytics and low latency data capabilities, respectively.

最後，我們近期收購的 R2 與 QuantHouse 的整合進展順利。我們已有效授權 R2 與 QuantHouse 分別主導我們在下一代跨資產類別投資組合分析，以及低延遲資料能力的開發工作。

S&P Indices, revenues increased 12%. We realized growth and trading volume of exchange traded derivatives as well as in assets under management for both mutual funds and exchange traded funds linked to S&P Indices. Despite a turbulent stock market during the quarter, assets under management in exchange traded funds linked to S&P Indices increased 7% to $349 billion. This was driven by a 10% increase in the number of exchange traded fund units which more than offset a decline in the net asset value per unit.

S&P 指數業務營收成長 12%。我們在交易所交易衍生性商品的成長與交易量，以及與 S&P 指數連結之共同基金與 ETF 的資產管理規模（AUM）方面皆實現成長。儘管本季股市波動劇烈，與 S&P 指數連結之 ETF 的資產管理規模仍成長 7%，達 3,490 億美元。此成長主要由 ETF 份額數量增加 10% 所帶動，足以抵銷每單位淨資產價值下滑的影響。

During the quarter, 17 brand-new indices and 27 variants to existing indices were launched. Also during the quarter, 11 new exchange traded funds linked to S&P Indices were launched bringing the total of exchange traded funds linked to S&P Indices to 430. These additions create new alternatives for investors and greater liquidity obviously to markets.

本季共推出 17 個全新指數，以及 27 個既有指數的變體版本。同樣在本季，推出了 11 檔與 S&P 指數連結的新 ETF，使與 S&P 指數連結的 ETF 總數達到 430 檔。這些新增項目為投資人創造新的選擇，並顯著提升市場流動性。

At the end of the quarter, we launched the S&P/Dow Jones Indices. This is our new joint venture with the CME Group. Here you can see the full-page ad that ran in the Financial Times and The Wall Street Journal announcing the launch. Alex Matturri, a veteran of the Index industry who has been running our Index business for a number of years, was named the CEO of S&P/Dow Jones Indices. This joint venture will enable our clients to create investment products that offer new choices to investors. As a result of our 73% ownership of the joint venture, we will for the first time participate in the profitability of CME's execution and clearing.

在本季末，我們推出了 S&P/Dow Jones Indices。這是我們與 CME Group 的新合資企業。各位可在此看到刊登於《金融時報》與《華爾街日報》的全版廣告，宣布正式啟動。指數產業資深人士 Alex Matturri，多年來一直負責我們的指數業務，已被任命為 S&P/Dow Jones Indices 的執行長（CEO）。此合資企業將使我們的客戶能創造投資產品，為投資人提供更多新選擇。由於我們持有該合資企業 73% 的股權，我們將首次參與 CME 在交易執行與清算業務的獲利。

With the S&P/Dow Jones Indices joint venture now in place, there are approximately $1.5 trillion directly linked to our indices and over 400 financial institutions that use our indices to build or price funds, swaps, notes, options, forwards and futures. We are proud that the S&P/Dow Jones Indices is home to some of the most widely followed and most trusted indices in the world.

隨著 S&P/Dow Jones Indices 合資企業正式到位，目前約有 1.5 兆美元直接與我們的指數連結，且有超過 400 家金融機構使用我們的指數來建構或定價基金、交換（swaps）、票據（notes）、選擇權、遠期（forwards）與期貨。我們深感自豪，S&P/Dow Jones Indices 匯聚了全球最廣為追蹤且最受信賴的一些指數。

Now let me turn to the Commodities & Commercial Group, which delivered year-over-year operating profit gains that led all segments. Revenue growth was 9% with International revenue up 16%. The leverage of the business is very evident and along with cost reductions resulted in operating margins that increased almost 700 basis points to over 29%.

接著我談談大宗商品與商業集團（Commodities & Commercial Group），其年對年營業利益增幅在各事業部門中居首。營收成長 9%，其中國際營收成長 16%。該業務的營運槓桿效益非常明顯，並在成本降低的配合下，使營業利益率提升近 700 個基點，至 29% 以上。

Within Commodities, subscriptions for petroleum, natural gas and steel products drove the 19% increase in revenue. We have capitalized on the acquisitions of BENTEK Energy and the Steel Business Briefing Group, to take advantage of cross-selling opportunities. In addition, due to volatility in the oil markets, we realized revenue growth from increased trading of future contracts linked to Platts pricing. Our Commodities business is now approaching a $0.5 billion on an annualized basis and is poised for further growth.

在大宗商品業務中，石油、天然氣與鋼鐵產品的訂閱帶動營收成長 19%。我們善用收購 BENTEK Energy 與 Steel Business Briefing Group 所帶來的效益，把握交叉銷售機會。此外，由於油市波動，我們也因與 Platts 定價連結之期貨合約交易增加而實現營收成長。我們的大宗商品業務按年化基礎計算已接近 5 億美元規模，並具備進一步成長的態勢。

Commercials revenue decreased 1%. J.D. Power's revenue growth was offset by modest declines in the remainder of the portfolio. The revenue growth at J.D. Power was the result of growth in the Power Information Network, for PIN, ad claims and syndicated reports.

商業業務（Commercials）營收下滑 1%。J.D. Power 的營收成長被投資組合其餘部分的小幅下滑所抵銷。J.D. Power 的營收成長主要來自 Power Information Network（PIN）、廣告宣稱（ad claims）以及聯合報告（syndicated reports）的成長。

The widely followed J.D. Power Initial Quality Study was released this quarter. In its 26th year, the study is purchased by virtually all of the world's major automotive manufacturers and results in meaningful ad claims from many of the companies whose automobiles rank highest in each category. I am pleased to say J.D. Power is on its way to its best year ever. Okay.

本季發布了廣受關注的 J.D. Power 新車品質研究（Initial Quality Study）。該研究已進入第 26 年，幾乎為全球所有主要汽車製造商所購買，並使許多在各類別中名列前茅的車廠得以提出具實質意義的廣告宣稱。我很高興地表示，J.D. Power 正邁向史上最佳的一年。好的。

With that, let me turn to Education and McGraw-Hill Education. McGraw-Hill Education reported a 12% decline in revenue, yet delivered a 36% increase in segment operating profit. The revenue decline occurred largely at School Education Group. We continue to expect a 10% decline in the K-12 market this year, which will represent in our opinion, the lowest spending level in over a decade and gives us opportunities looking ahead.

接下來我談談教育業務與 McGraw-Hill Education。McGraw-Hill Education 營收下滑 12%，但部門營業利益成長 36%。營收下滑主要發生在 School Education Group。我們仍預期今年 K-12 市場將下滑 10%；我們認為這將是十多年來最低的支出水準，同時也為我們未來帶來機會。

Despite this difficult market, the segment delivered cost reductions that overcame the revenue shortfall, enabled us to deliver solid growth in operating profit. Our focus is to ensure that the business has a cost structure that is appropriate for such challenging market realities and provides the flexibility to invest to accelerate digital development.

儘管市場艱困，該部門透過成本削減彌補營收缺口，使我們得以實現穩健的營業利益成長。我們的重點是確保業務具備符合此類嚴峻市場現實的成本結構，並提供投資彈性，以加速數位化發展。

Product development continues to focus on providing innovative digital learning materials for our customers. As a result of the increased sales of digital products, many of which are subscription-based, our deferred revenue has become more pronounced, increasing by approximately $50 million year-over-year.

產品開發仍聚焦於為客戶提供創新的數位學習教材。由於數位產品（其中許多為訂閱制）銷售增加，我們的遞延收入更加明顯，年對年約增加 5,000 萬美元。

The Higher Education, Professional and International Group reported a 2% decrease in revenue. Revenue growth at Higher Education was offset by declines at International which was almost entirely due to a stronger US dollar. Higher Education now has 1.4 million digital users, an increase of 40%, as digital products continue to displace books.

高等教育、專業與國際事業群（Higher Education, Professional and International Group）營收下滑 2%。高等教育的營收成長被國際業務的下滑所抵銷，而國際業務下滑幾乎完全是因美元走強所致。高等教育目前擁有 140 萬名數位使用者，成長 40%，因數位產品持續取代書籍。

One noteworthy product, McGraw-Hill Connect, which is a homework management platform, grew by 65%. It enables instructors to create assignments and track student performance and provides a range of digital learning tools such as LearnSmart that improve student learning. LearnSmart is an adaptive learning system that is available for approximately 150 different college course titles.

其中一項值得一提的產品是 McGraw-Hill Connect，這是一個作業管理平台，成長 65%。它讓授課教師能建立作業並追蹤學生表現，並提供一系列數位學習工具（例如 LearnSmart）以提升學生學習成效。LearnSmart 是一套自適應學習系統，約可用於 150 種不同的大學課程教材。

The School Education Group reported a 20% decline and that was in revenue from the prior year with decreases occurring in both instructional materials and testing.

School Education Group 的營收較去年下滑 20%，其中教學教材與測驗兩方面皆出現下滑。

The key third-quarter selling season is underway and our view of the market, as I said a moment ago, remains unchanged. We continue to believe 2012 will be the low watermark in the K-12 space and the market should begin to show a modest recovery as we get into 2013.

關鍵的第三季銷售旺季正在進行中，而我們對市場的看法，如我剛才所說，仍維持不變。我們仍相信 2012 年將是 K-12 領域的谷底，市場應會在進入 2013 年後開始呈現溫和復甦。

Over the next couple of years, we anticipate that demand for our Common Core compliant materials will increase as school districts prepare for the new tests that take effect in the spring of 2015. 46 states have adopted the Common Core State Standards and need to prepare their students for these new tests.

在未來幾年，我們預期對符合 Common Core（共同核心）標準之教材的需求將增加，因為各學區正為 2015 年春季生效的新測驗做準備。已有 46 個州採納 Common Core 州標準，並需要讓學生為這些新測驗做好準備。

Our testing business was selected by the Smarter Balanced Assessment Consortium to develop its suite of language arts and mathematics test items for the new Common Core assessments. Smarter Balanced is one of two state-led consortia funded by the US Department of Education to develop assessment tools to help states gauge student progress towards meeting the new Common Core standards.

我們的測驗業務獲「Smarter Balanced Assessment Consortium」選定，為新的 Common Core 評量開發其語文藝術與數學測驗題組。Smarter Balanced 是由美國教育部資助的兩個州主導聯盟之一，負責開發評量工具，以協助各州衡量學生在達成新 Common Core 標準方面的進展。

Together, with a co-contractor, we are also developing test items for the second federally funded Test Consortium which is called the Partnership Reassessment of Readiness for College and Careers.

此外，我們也與一位共同承包商合作，為第二個由聯邦資助的測驗聯盟開發試題；該聯盟名為「大學與職涯準備度夥伴重新評量（Partnership Reassessment of Readiness for College and Careers）」。

We are setting up the Education business to thrive as a standalone Company. We are putting in place the cost structure and digital capabilities necessary for the McGraw-Hill Education to lead the transformation of the industry and we are absolutely thrilled to have Buzz Waterhouse and Pat Milano in place to lead this effort along with the entire team.

我們正在建立教育事業，使其能以獨立公司之姿蓬勃發展。我們正建置必要的成本結構與數位能力，讓 McGraw-Hill Education 能引領產業轉型；我們也非常高興由 Buzz Waterhouse 與 Pat Milano 與整個團隊一同領導這項工作。

In summary, The McGraw-Hill Companies is off to a very strong start with record first-half adjusted diluted earnings per share. McGraw-Hill Financial should continue to deliver solid top and bottom line growth. We continue to build new capabilities to deliver organic growth while pursuing bolt-on acquisitions to add additional expertise and capabilities, or move into new markets.

總結而言，McGraw-Hill Companies 以創紀錄的上半年調整後稀釋每股盈餘，展現非常強勁的開局。McGraw-Hill Financial 應可持續帶來穩健的營收與獲利成長。我們持續打造新能力以推動內生成長，同時尋求補強型併購，以增加額外的專業與能力，或進入新市場。

McGraw-Hill Education will focus on all that is required to become a standalone Company. We are creating a cost structure that is right-sized to serve the education market and building out our unique set of digital products to meet the needs of our customers. Our intent is to position this business for longer-term growth as the market recovers and the digital shift accelerates.

McGraw-Hill Education 將專注於成為獨立公司所需的一切。我們正在打造適合教育市場規模的成本結構，並擴充我們獨特的數位產品組合，以滿足客戶需求。我們的目標是，隨著市場復甦與數位轉型加速，讓此業務具備更長期的成長定位。

The Company will remain focused on delivering on its Growth and Value Plan and continue to work towards the completion of the spinoff of McGraw-Hill Education by the end of the year.

公司將持續聚焦於落實其「成長與價值計畫（Growth and Value Plan）」，並繼續推進在年底前完成 McGraw-Hill Education 分拆上市的工作。

And to say the least, 2012 will be remembered as a very important inflection point in our Company's history. I am very pleased with the results of both the first and now the second quarter record results.

至少可以說，2012 年將被視為本公司歷史上一個非常重要的轉折點。我對第一季以及現在第二季的創紀錄成果感到非常滿意。

Okay. Let me leave it there. That completes my prepared remarks and I will now ask Jack Callahan, our Chief Financial Officer, to update you on some of our key financials. Jack?

好的。我就先說到這裡。以上是我預先準備的發言，接下來我將請我們的財務長 Jack Callahan 向各位更新一些關鍵財務數據。Jack？

Thank you, Terry. This morning I want to provide additional detail on our consolidated results, including cash flow, and provide additional detail on the progress and one-time costs in the implementation of the Growth and Value Plan.

謝謝你，Terry。今天早上我想就我們的合併業績提供更多細節（包括現金流），並就「成長與價值計畫」執行進度及其一次性成本提供更多說明。

Let me begin by discussing our consolidated results. Revenue decreased 1% year-over-year. However, it was more than offset by a 5% year-over-year decrease in overall adjusted expenses. The decrease in expenses was primarily the result of the Growth and Value Plan cost reduction initiatives that began in the fourth quarter of 2011 and will continue into next year. As a result, consolidated adjusted operating profit increased 14% and consolidated adjusted operating margins increased over 300 basis points to 26.3%. Obviously, we are pleased with the progress thus far in margin expansion.

我先從合併業績談起。營收年減 1%。然而，整體調整後費用年減 5%，已足以抵銷上述影響。費用下降主要來自「成長與價值計畫」的成本削減措施，該措施自 2011 年第四季開始，並將延續至明年。因此，合併調整後營業利益成長 14%，合併調整後營業利益率提升逾 300 個基點至 26.3%。顯然，我們對目前利潤率擴張的進展感到滿意。

To summarize the operating results Terry just reviewed, there was continued revenue growth at McGraw-Hill Financial of 5% with margins that expanded 140 basis points delivering strong adjusted operating profit growth of 9%.

總結 Terry 剛才回顧的營運成果，McGraw-Hill Financial 營收持續成長 5%，利潤率擴張 140 個基點，帶動調整後營業利益強勁成長 9%。

For McGraw-Hill Education, while there was a 12% decline in revenue, margins expanded 420 basis points based on the meaningful cost initiatives that began with the significant restructuring of the business in the fourth-quarter of last year. Both businesses did benefit from a reduction in employee-related costs due to the realignment of our retirement programs.

至於 McGraw-Hill Education，雖然營收下滑 12%，但在去年第四季對業務進行重大重整後所啟動的具體成本措施帶動下，利潤率擴張 420 個基點。兩項業務也都受惠於退休計畫重新調整所帶來的員工相關成本下降。

The share repurchase program remains an important aspect of the Growth and Value Plan and the impact was evident again this quarter. Year-over-year, we reduced shares outstanding by 24 million shares. This amplified a 15% increase in adjusted net income to a 25% increase in adjusted diluted earnings per share, or $0.85 per share.

庫藏股回購計畫仍是「成長與價值計畫」的重要一環，其影響在本季再次顯現。與去年同期相比，我們將流通在外股數減少 2,400 萬股。這使調整後淨利 15% 的成長，放大為調整後稀釋每股盈餘成長 25%，即每股 0.85 美元。

Since the beginning of 2011 through the second quarter of 2012, the Company has repurchased nearly 36 million shares at a weighted average price of $42.05. This reduced shares outstanding by approximately 12%.

自 2011 年初至 2012 年第二季，公司以加權平均價格 42.05 美元回購近 3,600 萬股。這使流通在外股數約減少 12%。

Apart from the completion of the accelerated share repurchase program in April, no other shares were repurchased in the quarter. However, we do anticipate resuming share repurchases over the back half of the year which will provide continued EPS leverage into next year.

除 4 月完成加速庫藏股回購計畫外，本季未再回購其他股份。不過，我們預期將在下半年恢復回購，並在明年持續提供每股盈餘（EPS）的槓桿效益。

We continue to have a very strong balance sheet with approximately $840 million in cash and short-term investments. Year over year, our free cash flow was down. This decrease was largely the result of a temporary acceleration of payments of approximately $100 million to vendors associated with the transition to a new accounting system as well as $65 million of cash outlays associated with the Growth and Value Plan.

我們的資產負債表仍非常強健，現金與短期投資約 8.40 億美元。與去年同期相比，我們的自由現金流下降。此下降主要是因導入新會計系統而對供應商付款約 1.00 億美元的暫時性提前，以及與「成長與價值計畫」相關的 6,500 萬美元現金支出。

On a full-year basis, we fully expect to deliver solid free cash flow. Our guidance of approximately $750 million excluding cash outlays associated with the Growth and Value Plan remains unchanged.

以全年來看，我們完全預期能交出穩健的自由現金流。我們對自由現金流約 7.50 億美元的指引（不含與「成長與價值計畫」相關的現金支出）維持不變。

Now let me provide some additional details around the execution of the Growth and Value Plan. During the quarter, we continued to make progress on our target of at least $100 million in run rate cost savings by the end of 2012. The actions taken over the last several quarters drove in part the cost reductions that were realized in the second quarter. Year-over-year total adjusted expenses decreased 5%. As I mentioned earlier, one important component of this was the realignment of our US pension plan that took effect on April 1.

接著我補充一些「成長與價值計畫」執行面的細節。本季我們持續朝 2012 年底前至少達成 1.00 億美元年化成本節省的目標推進。過去幾季採取的行動，部分推動了第二季所實現的成本下降。與去年同期相比，調整後總費用下降 5%。如我先前提到，其中一項重要因素是我們於 4 月 1 日生效的美國退休金計畫重新調整。

As we form to new companies, we need to separate several critical support operations that are currently shared. The next important round of cost savings will benefit from the realignment of these operations. We currently have 15 work streams underway to implement cost savings in the area of accounting, purchasing, information technology, human resources and real estate. We are already deep in the implementation of these plans and we anticipate the realization of these cost reduction benefits by the time separation occurs in the latter part of this year.

在我們組成兩家新公司之際，需要將目前共用的數項關鍵支援作業分拆。下一波重要的成本節省將受惠於這些作業的重新調整。目前我們有 15 條工作流程正在推進，以在會計、採購、資訊科技、人力資源與不動產等領域落實成本節省。我們已深入執行這些計畫，並預期在今年稍晚完成分拆時即可實現這些降本效益。

During the second quarter, we incurred $42 million of one-time Growth and Value Plan costs that we noted in this morning's press release. They include $19 million for professional fees, $15 million for deal fees and $8 million for severance. We anticipate that for the remainder of the year we will incur an additional $80 million of one-time separation expenses necessary to implement the Growth and Value Plan. These one-time expenses are largely professional fees as we need to support the various consultants, business process and information technology firms and financial advisors. Please keep in mind this is a working estimate.

第二季我們發生 4,200 萬美元的一次性「成長與價值計畫」成本，已於今早新聞稿中說明。其中包括 1,900 萬美元的專業服務費、1,500 萬美元的交易費用，以及 800 萬美元的資遣費。我們預期今年剩餘期間，將再發生額外 8,000 萬美元的一次性分拆費用，以推動「成長與價值計畫」的落實。這些一次性費用多為專業服務費，因我們需要支援各類顧問、業務流程與資訊科技公司，以及財務顧問。請注意，這是一項工作中的估計值。

In addition, we anticipate that during 2012 we will continue to incur restructuring costs as part of our ongoing cost reduction initiatives. While the timing of these actions is still fluid, restructuring expense for 2012 could be up to approximately $65 million over the balance of the year.

此外，我們預期 2012 年仍將因持續的降本措施而發生重整成本。雖然這些行動的時點仍具彈性，但 2012 年的重整費用在今年剩餘期間可能最高約達 6,500 萬美元。

The Form 10 was filed several weeks ago and outlined many aspects of the separation. There are a few key financial items that I would like to draw your attention to.

Form 10 已於數週前提交，並概述了分拆的多個面向。有幾項關鍵的財務事項我想請各位特別留意。

McGraw-Hill Financial will retain all of the outstanding long-term debt as well substantially all of the cash on hand at the time of the spin. Concurrent with the spin, we anticipate that McGraw-Hill Education will issue up to $600 million in new debt, likely a mix of bank, term loans, and public debt. McGraw-Hill Education will retain approximately $100 million of cash and issue a one-time dividend to McGraw-Hill Financial for up to $500 million.

McGraw-Hill Financial 將保留所有未償還的長期債務，以及在分拆時點幾乎所有的手頭現金。與分拆同時，我們預期 McGraw-Hill Education 將發行最多 6 億美元的新債務，可能由銀行融資、定期貸款及公開市場債務所組成。McGraw-Hill Education 將保留約 1 億美元現金，並向 McGraw-Hill Financial 發放一次性股利，金額最高可達 5 億美元。

McGraw-Hill Education will also establish a revolving credit line. This along with $100 million of newly raised cash should provide McGraw-Hill Education with ample liquidity to meet its business needs.

McGraw-Hill Education 也將建立一條循環信用額度。此舉加上新募集的 1 億美元現金，應可為 McGraw-Hill Education 提供充足流動性以滿足其業務需求。

Along with receiving the one-time dividend of up to $500 million, McGraw-Hill Financial will retain all of the pension liabilities which are now largely frozen plans for both companies as well as other selected liabilities to simplify separation.

除將收到最高 5 億美元的一次性股利外，McGraw-Hill Financial 也將保留所有退休金負債；目前這些多為兩家公司皆已大致凍結的計畫，並另保留其他特定負債以簡化分拆作業。

In the spin, our goal is to provide the Education business with balance sheet flexibility to support its long-term growth potential.

在分拆中，我們的目標是讓 Education 業務具備資產負債表的彈性，以支持其長期成長潛力。

As we now look to the back half of the year, there are a couple of items that I want to point now. First, as I mentioned earlier, we plan on resuming share repurchases. Our plan is to repurchase up to $500 million in the second half of the year; as always, share repurchases are subject to appropriate market conditions.

當我們展望今年下半年時，有幾點我想在此提出。第一，如我先前提到的，我們計畫恢復股票回購。我們計畫在下半年回購最多 5 億美元；一如既往，股票回購仍須視適當的市場狀況而定。

Another item that I want to highlight is the financial impact of our new joint venture, S&P/Dow Jones Indices. The transaction was closed at the end of June and as such, our balance sheet reflects $792 million of additional net assets. It was closed on the last business day in the quarter such that the income statement impact was negligible. We anticipate that by the end of the third quarter, the net income attributable to non-controlling interest line on the income statement will become more prominent.

另一項我想強調的是我們新合資企業 S&P/Dow Jones Indices 的財務影響。該交易已於 6 月底完成，因此我們的資產負債表反映新增 7.92 億美元的淨資產。由於是在該季最後一個營業日完成，因此對損益表的影響可忽略不計。我們預期至第三季末，損益表中「歸屬於非控制權益之淨利」項目將會更為顯著。

Since we own 73% of the joint venture, we will consolidate the entire business in our income statement. 27% of the joint venture net income is then removed and recorded as net income attribute to non-controlling interest. Obviously, we will review the impact of this exciting new venture with CME once they are operating results to review on the third-quarter call.

由於我們持有該合資企業 73% 的股權，我們將在損益表中合併整體業務。其後將合資企業淨利的 27% 扣除，並列為歸屬於非控制權益之淨利。顯然，一旦第三季電話會議時有營運結果可供檢視，我們將與 CME 一同回顧這項令人振奮的新事業所帶來的影響。

In closing, our outlook for the balance of 2012 remains positive. We are executing upon the Growth and Value Plan that we laid out late last year. At the same time, we delivered record first-half adjusted earnings per share.

最後，我們對 2012 年剩餘期間的展望仍然正面。我們正執行去年年底提出的「成長與價值計畫」。同時，我們也交出上半年創紀錄的調整後每股盈餘。

While there is an inclination to raise guidance after such a strong first half, we need to be mindful that the third quarter, our largest of the year, is still ahead of us. This is the key quarter for McGraw-Hill Education as schools across the US purchase the lion's share of educational materials for the upcoming school year. Therefore, we believe it is prudent to keep our guidance unchanged with diluted adjusted earnings per share of $3.25 to $3.35. Although based on the strong first half, we now anticipate being near the high end of that range.

儘管在如此強勁的上半年之後，市場可能傾向上調財測，但我們必須留意第三季——我們全年最大的一季——仍在前方。對 McGraw-Hill Education 而言，這是關鍵季度，因為全美各地學校會在此期間為即將到來的學年採購絕大部分教育教材。因此，我們認為審慎起見，維持財測不變，稀釋後調整每股盈餘為 3.25 至 3.35 美元。不過，基於上半年表現強勁，我們目前預期將接近該區間的高端。

Our cost reduction efforts will continue and we fully expect to deliver on our target of a least $100 million in run rate cost savings by the end of the year. Executing on all the aspects of the Growth and Value Plan remains our highest priority and we continue to anticipate completing the separation into two powerful industry leaders, McGraw-Hill Education and McGraw-Hill Financial by year end.

我們的成本削減工作將持續進行，我們完全預期在年底前達成至少 1 億美元的年度化（run rate）成本節省目標。全面落實「成長與價值計畫」的各項內容仍是我們的最高優先事項；我們也持續預期在年底前完成分拆，成為兩家強大的產業領導者：McGraw-Hill Education 與 McGraw-Hill Financial。

We are doing all the work to support a spin of McGraw-Hill Education by year end. We are also evaluating other options to deliver shareholder value including a potential sale. We will update the market as appropriate in the coming months.

我們正進行所有必要工作，以支持在年底前分拆 McGraw-Hill Education。我們也在評估其他可為股東創造價值的選項，包括潛在出售。未來幾個月我們將在適當時機向市場更新。

With that, thank you for joining the call this morning and now let me turn the call back over to Chip Merritt to moderate the Q&A.

以上，感謝各位今早參與電話會議，接下來我把電話交回 Chip Merritt 來主持問答環節。

Thank you, Jack. Just a couple of instructions for our phone participants. (Operator Instructions). And now, operator, if you would please, we will take our first question.

謝謝你，Jack。先給電話與會者幾點說明。（接線員指示）。現在，接線員，麻煩請讓我們開始第一個問題。

William Bird, Lazard.

William Bird，Lazard。

Good morning. Thank you. Two questions. First, on a GAAP basis, how much of the $100 million in cost savings do you expect to fall in 2012? And second, about how much leverage are you comfortable with for McGraw-Hill Financial post spin? Thanks.

早安。謝謝。兩個問題。第一，以 GAAP 基礎來看，1 億美元的成本節省中，您預期 2012 年會落實多少？第二，分拆後對於 McGraw-Hill Financial，您認為可接受的槓桿水準大約是多少？謝謝。

Well, Bill -- good morning, Bill. First of all, in terms of the cost savings and in terms of being able to realize those savings, we will realize those cost savings in 2012. And again, not to be nebulous about it, but we are seeing at least $100 million. We believe as we go through all of the reductions in shared costs and all of those things as we go through the separation process, that there will be more.

好的，Bill——早安，Bill。首先，就成本節省以及實現這些節省而言，我們會在 2012 年實現這些成本節省。再說一次，不想講得太含糊，但我們看到至少 1 億美元。我們相信，隨著我們在分拆過程中削減共享成本及相關事項，還會有更多。

But I think it is safe to say at this point at least $100 million is a good way to do it. Leverage (multiple speakers)

但我認為目前可以很有把握地說，至少 1 億美元是一個合理的說法。槓桿（多位講者同時發言）

I'm sorry (inaudible) on a run rate base absolutely at least $100 million by the fourth quarter. In terms of actual flow through the P&L, within 2012, I would say about two-thirds would flow within the P&L this year and obviously, the full $100 million would benefit both businesses as we go into next year. And again, that excludes the one-time impact of the cost that we highlighted today around the separation expenses.

抱歉（聽不清楚），以年度化基礎來看，到第四季絕對至少 1 億美元。至於實際反映到損益表（P&L）的部分，在 2012 年內我會說大約三分之二會在今年的損益表中反映；而完整的 1 億美元將在進入明年時讓兩項業務都受益。另外，再次說明，這不包含我們今天提到、與分拆費用相關的一次性成本影響。

That's right, and again, at least $100 million. And also, in terms of leverage, it's way too early to tell at this point. I mean obviously we've got a very clean balance sheet and relative to an organic growth projects, transactions, shares repurchased and things like that, we will have ample capability to do whatever we need to do on that part. So we have a very clean balance sheet.

沒錯，而且同樣是至少 1 億美元。另外，就槓桿而言，現在要判斷還太早。我的意思是，顯然我們的資產負債表非常乾淨；相較於有機成長專案、交易、股票回購等事項，我們將有充足能力在這方面做任何需要做的事。所以我們的資產負債表非常乾淨。

And just to clarify on the cost saves, how much have you realized in the P&L year-to-date?

再釐清一下成本節省：截至目前為止，您們在損益表中已實現多少？

Well, going back to my comment a minute ago that we anticipate that at least two-thirds to benefit the P&L within the full year. I would say a little less than half that has already been reflected in the P&L year-to-date.

嗯，回到我剛才的評論，我們預期全年至少約三分之二會反映在損益表中。我會說，截至目前為止，已反映在損益表中的金額略低於其中的一半。

And given the conditions that we are facing at this point, obviously in terms of some of the lower revenue growth and higher profit growth, obviously cost reductions are having a significant impact.

而且在我們目前面臨的環境下，顯然就較低的營收成長與較高的獲利成長而言，成本削減正產生顯著影響。

Great, thank you.

很好，謝謝。

And obviously we're also benefiting from the Education business is obviously benefiting from the very significant cost restructuring they did in the fourth quarter, where we basically -- we eliminated -- last year, we eliminated 10% of all positions. That obviously is also adding incremental benefit.

而且顯然我們也正受惠於 Education 業務在第四季所做的非常大幅度的成本重整；基本上——我們已經削減——去年我們削減了所有職位的 10%。這顯然也帶來額外的增量效益。

Could you also comment on just what you are seeing in terms of the ratings pipeline right now?

您也能評論一下，就目前而言，您在評等業務的案源管線（pipeline）方面看到了什麼嗎？

Yes, I mean as we said, what we are seeing on the structured finance side we are starting to see some pickup on the commercial and a little bit on the residential side. Obviously the public finance market is quite strong. You know, bigger than that, Bill, is that you are looking at in terms of nonfinancial corporate securities over the next five years, you are looking at $46 trillion of refinancing and new monies on that part. So we are starting to see some pickup on that side.

是的，我的意思是，正如我們所說，在結構性融資這一端，我們開始看到商用端有所回升，住宅端也有一點起色。顯然，公共融資市場相當強勁。你知道，比那更大的，Bill，是你在看未來五年非金融企業證券方面，將有46兆美元的再融資與新增資金需求。所以我們開始在那一端看到一些回升。

Obviously, investment grade is doing better than speculative grade. That goes for both here and Europe and parts of Asia Pacific as well. But, no, it will start to pick up and we will start to see more activity on that part and the plus sign is that we are seeing it on the structured finance area.

顯然，投資級的表現優於投機級。這在美國、歐洲以及亞太部分地區都是如此。不過，是的，它會開始回升，我們也會開始在那一端看到更多活動；而正面的訊號是，我們在結構性融資領域也看到了這種回升。

Great, thank you.

很好，謝謝。

Peter Appert, Piper Jaffray.

Peter Appert，Piper Jaffray。

Thanks. Good morning. So, Terry, the cost growth slowed considerably at S&P in the second quarter which helped you generate some pretty good margins in the context of the tough revenue environment. Should that pattern replay you think in the second half of the year?

謝謝。早安。所以，Terry，S&P在第二季的成本成長明顯放緩，這在艱困的營收環境下幫助你們創造了相當不錯的利潤率。你認為這種模式在下半年會重演嗎？

Well, I mean you've got ongoing cost reductions in one area but you're also right-sizing a little bit but the big area is the foreign exchange. Again, especially coming out of Europe, revenues are impacted by foreign exchange, but also positively the expense base is also affected that way you know.

嗯，我的意思是，你在某些領域持續進行成本削減，同時也在做一些規模調整，但最大的因素是外匯。再說一次，特別是來自歐洲的部分，營收受到外匯影響，但同時費用基礎也會以同樣方式受到正向影響，你知道的。

So we will have to see how the currency markets play itself through, but we are obviously benefiting on the cost side with foreign exchange.

所以我們得看看匯市接下來會如何發展，但很明顯我們在成本端正受惠於外匯因素。

And, Peter, I would just add that looking forward over the balance of the year, as Terry mentioned in his remarks, we have a tough expense overlap particularly in the third quarter. So I would be cautious -- we are cautious as we look at the third quarter. But on a full-year basis, you know, we are -- our anticipation is that the margins would remain 40% or better.

而且，Peter，我再補充一點：展望今年剩餘期間，如同Terry在發言中提到的，我們在費用上有一個相當艱難的比較基期，特別是在第三季。所以我會保持謹慎——我們在看第三季時也很謹慎。但以全年來看，你知道，我們——我們的預期是利潤率將維持在40%或更高。

Okay.

好的。

On a full-year basis.

以全年來看。

Got it. Thank you. And could I ask just two other questions please? The S&P Dow Jones Index business, Jack, you mentioned this I think in your part of the call. I am just trying to figure out how big is the incremental contribution from that in the second half of the year? That is question one.

了解。謝謝。另外我可以再問兩個問題嗎？S&P Dow Jones指數業務，Jack，我想你在電話會議中提到過。我只是想弄清楚，下半年它帶來的增量貢獻有多大？這是第一個問題。

And then question two, unrelated to that, Jack, you also mentioned exploring the possible sale of the Education business. If you went that route, obviously you would be left with considerable cash balances. How should we think about the potential use of that cash?

第二個問題，與此無關：Jack，你也提到正在探索教育事業部可能的出售。如果走那條路，顯然你們將會留下相當可觀的現金餘額。我們應該如何看待這些現金的潛在用途？

Two great questions. I mean for the JV over the balance of the year, from an earnings per share point of view, we think it will be accretive a penny or two. And on the third quarter call, once we actually have real operating results, we will detail that much more than we can today.

兩個都很棒的問題。就合資公司（JV）在今年剩餘期間而言，從每股盈餘的角度，我們認為會有增益，大概增加一到兩美分。而在第三季電話會議上，一旦我們實際拿到真正的營運結果，我們會比今天能做的更詳細說明。

And then I will be honest, we are very focused on trying to determine the right strategic path for the Education business, spin or potentially sale or other options. If obviously in the sale we would have a fairly significant cash infusion, we haven't spent a lot of time, quite honestly, trying to sort out what would we do with that. Obviously it is a high-class issue for us to consider.

另外我坦白說，我們非常專注於為教育事業部判斷正確的策略路徑：分拆（spin）、可能出售或其他選項。如果真的出售，顯然我們會有相當可觀的現金注入；老實說，我們還沒有花很多時間去梳理拿到那筆錢後要怎麼用。顯然，這對我們來說是個「高級的煩惱」（high-class issue），值得再考量。

I think you should expect some part of that would be consistent with our return of capital policy that we have as part of the Growth and Value Plan.

我想你可以預期，其中一部分會與我們在「成長與價值計畫」（Growth and Value Plan）中所訂的資本回饋政策一致。

Great, thank you.

很好，謝謝。

And, obviously, again we're in a very, very sensitive period with the Education business, because we have to make sure that we are prepared for the spin and we are. And standing up the Education business as a stand-alone has taken all the attention on that part. Obviously being responsive as a public company to every other interest as well, we are going through a process on that as well.

而且，顯然，再次強調，我們正處於教育事業部一個非常、非常敏感的時期，因為我們必須確保已為分拆做好準備，而我們確實已經準備好了。把教育事業部建立成為一個獨立運作的公司，已經占用了那一端所有的注意力。當然，作為一家上市公司，我們也必須對其他各方利益保持回應，因此我們也正在就此進行相關流程。

But the most important part is that this is a 2012 event and that it is going to be a stand-alone business and we have to make sure that in every possible way that it is capable of being able to deliver on its strategic mission.

但最重要的是，這會是2012年的一個事件，而且它將成為一個獨立的事業；我們必須確保在各個可能的面向上，它都有能力交付其策略使命。

Now, in terms of -- as Jack said, proceeds and everything else, you can look at the key components. It will definitely have some transaction component to it. It will definitely have some organic specialty as we continue to build out on areas like Platts and S&P/Dow Jones Indices and things like that. Also the geographic expansion net ratings on that but also in terms of share repurchase as well.

現在，就——如Jack所說，關於資金收入（proceeds）以及其他一切，你可以看幾個關鍵組成部分。它一定會包含一些交易性的成分。它也一定會有一些內生成長的專長領域，因為我們會持續在像Platts、S&P/Dow Jones Indices等領域擴建，以及諸如此類的事情。另外也包括評等業務在地理擴張上的淨增，以及股票回購等。

Great. Thanks, Terry.

很好。謝謝你，Terry。

Craig Huber, Huber Research Partners.

Craig Huber，Huber Research Partners。

Yes, good morning. I have a very specific question first. On the transaction line in your Ratings business, you've given these various city bankruptcies of late and I've noticed a number of downgrades out there as well over the last six months of so, an increasing number. How concerned are you about the public finance market out there? I know it is going very strong now given low rates, and easy the comp was year-over-year. But how concerned are you guys and your analysts that this could materially impact if this continues debt issuance on US finance?

是的，早安。我先問一個非常具體的問題。在你們評等業務的交易收入（transaction line）方面，最近出現了各種城市破產案例，我也注意到過去大約六個月左右有不少降評，而且數量在增加。你們對外部的公共融資市場有多擔心？我知道在低利率環境下它目前表現很強，而且年對年的比較基期也很容易。但如果這種情況持續，你們和你們的分析師有多擔心它會對美國公共融資的債務發行造成實質影響？

Yes, well, you know, it is very strong for a very good reason. I mean you've got so many states that are having difficulties, and as we were saying, non-transaction revenue represented 58% of the second-quarter revenue and all of that. And again, that was a lot to do with the strengthening of the US dollar

是的，嗯，你知道，它之所以非常強，是有很好的原因的。我的意思是，有這麼多州正面臨困難；而且如我們所說，非交易收入占第二季營收的58%，以及諸如此類。而且再一次，這在很大程度上與美元走強有關。

But we are not -- I mean we are all concerned in terms of a lack of growth and some of the economic conditions and all of that. We are all influenced by that, but clearly you're going to see more public finance issuance on that one, and it's a critical phase and we are watching it very carefully. And again from a credit worthiness standpoint, we will be extremely diligent in terms of stating exactly what we see.

但我們並不是——我的意思是，我們都會擔心成長不足以及一些經濟狀況等等。我們都會受到那樣的影響，但很明顯你會看到更多公共融資的發行；這是一個關鍵階段，我們正在非常密切地觀察。而且再一次，從信用狀況（credit worthiness）的角度，我們會非常嚴謹地說明我們所看到的情況。

But again, this pickup in city bankruptcies out there, you're not overly concerned of what that could do for debt issuance in that -- the muni market for a period of time?

但再問一次，外面城市破產案例的增加，你們並不會過度擔心它在一段時間內對債務發行——也就是市政債市場——可能造成的影響嗎？

No, we are not overly concerned.

不，我們不會過度擔心。

Okay, and also on the non-transaction line for the entire Ratings business, can you just talk about -- I know it was up here 2% in the quarter, adjusting for currency. But just how your outlook is there in the back half of the year and also about any potential price increases what you are doing there?

好的，另外關於整個評等業務的非交易收入（non-transaction line），你能否談談——我知道若調整匯率因素，本季成長了2%。但請談談你們對下半年那一塊的展望，以及你們在那裡是否有任何潛在的漲價措施、你們正在做些什麼？

Well, yes, I mean again from our standpoint, it would be modest price increases but again, what you really have to focus on is the currency side of it. The strengthening US dollar is obviously influencing it but excluding the impact of foreign exchange rate, we see an increase in the non-transaction revenue.

嗯，是的，我的意思是，再次從我們的立場來看，會是溫和的價格上調，但同樣地，你真正需要關注的是匯率面。美元走強顯然正在影響它，但若排除外匯匯率的影響，我們看到非交易收入有所增加。

Yes, our current forecast assumes sort of low single-digit growth in that area over the balance of the year. So, obviously, to Terry's point, currency and then obviously how active the markets are on the transaction side will drive the business for the next six months.

是的，我們目前的預測是假設在今年剩餘期間該領域呈現低個位數成長。所以，顯然如 Terry 所說，匯率因素，以及交易端市場活躍程度，將在未來六個月推動業務表現。

That's right. Low single-digit, net modest increases.

沒錯。低個位數、淨額溫和增加。

Back to the other question earlier about the Dow Jones Indices JV, can you ballpark the revenue impact there, the positive impact there? Is it roughly say $20 million to you guys on a quarterly basis? Can you just ballpark it for us?

回到先前關於道瓊指數合資企業（JV）的另一個問題，你能否大致估算那邊的營收影響、正面影響？大概對你們來說每季約 2,000 萬美元左右嗎？可以幫我們粗略估一下嗎？

I would put it closer to $25 million plus.

我會把它估得更接近 2,500 萬美元以上。

Per quarter?

每季？

Per quarter.

每季。

Okay. My last --

好的。我最後一個——

So for the balance of the year, somewhere between $50 million to $60 million.

所以就今年剩餘期間而言，大約在 5,000 萬到 6,000 萬美元之間。

Okay, my last question please. On Education, can you just update us on your latest thoughts on the digital migration of [L High] as well as college, what you think that actually means to your profits, profit dollars, not margins? Not revenues, what the actual profits at the end of the day, the dollar impact, please?

好的，我最後一個問題。關於教育業務，能否更新一下你們對 [L High] 以及大學端數位遷移的最新看法？你認為這對你們的利潤、利潤金額（不是利潤率）實際意味著什麼？不是營收，而是最終實際利潤的美元影響，麻煩說明一下？

Well, that say -- I mean that is where it is coming from. And it is happening very, very rapidly and in particular at the higher education level. As you know, with some of the transformation, with the Apple partnership and things like that, both Professional and Higher Education have significant title expansion in that area, and that will flow this year and next year to increases on the profitability.

嗯，那就是——我的意思是，這正是它的來源。而且進展非常、非常迅速，尤其是在高等教育層級。如你所知，隨著一些轉型，例如與 Apple 的合作夥伴關係等，專業與高等教育兩端在該領域都有顯著的教材（title）擴充，而這將在今年與明年反映為獲利能力的提升。

The K-12 area is still one that is very fragmented. We have pushed very hard on the high school market in terms of new title capabilities and the like, but again, because of state and local municipality economic conditions, it will remain fragmented but the Higher Ed and the Professional side, it will be a direct contribution.

K-12 領域仍然非常分散。我們在高中市場方面就新教材能力等推進得非常積極，但同樣地，由於州與地方政府的經濟狀況，它仍會維持分散；不過高等教育與專業端將會是直接的貢獻。

(inaudible) point as an example, obviously it is much smaller because it's not Higher Ed but on the Professional business, while it is a small business, it is our most digitally advanced, and we have continued to build profitability in that business. So we have some experience in managing through this transition and it will obviously work differently and the Education markets in either Higher Ed or a K-12 going forward, but we are working our way through that.

（聽不清）舉例來說，顯然它規模小得多，因為它不是高等教育；但在專業業務方面，雖然規模不大，卻是我們數位化程度最高的業務，我們也持續在該業務提升獲利能力。因此，我們在管理這個轉型過程上有一些經驗；而未來不論是高等教育或 K-12 的教育市場，運作方式顯然會有所不同，但我們正在逐步推進。

Great, thank you.

很好，謝謝。

Doug Arthur, Evercore.

Doug Arthur，Evercore。

Yes, Terry, going back to S&P Ratings and particularly focusing on transaction revenues, irrespective of the currency hit, I don't think I have ever seen a quarter where there was such a divergence between US activity and particularly European. And I guess that is for the obvious reasons that we all read about every day. But do you -- how do you see that playing out or particularly in Europe over the second half of the year, more of the same?

是的，Terry，回到 S&P Ratings，特別聚焦在交易收入上，不考慮匯率衝擊，我想我從未見過某一季美國活動與尤其是歐洲之間出現如此大的分歧。我想原因很明顯，我們每天都在新聞上看到。但你——你怎麼看這種情況的發展，特別是今年下半年在歐洲，會不會還是差不多？

I would say you're probably right, Doug. It is more of the same, although I think you will start to see a little pickup in the structured finance area on that one, and we are looking to that. But again, the European environment is so difficult right now. I would say that it would probably be more of the same.

我會說你大概是對的，Doug。大致上會是差不多的情況，不過我認為在結構性融資領域你會開始看到一些回升，我們也在關注這點。但同樣地，歐洲目前的環境非常艱難。我會說大概還是會差不多。

Okay, great. Thank you.

好的，很好。謝謝。

David Reynolds, Jefferies.

David Reynolds，Jefferies。

Morning, yes, David Reynolds here from Jefferies. I wonder if I could just ask a question about McGraw-Hill Education. Clearly you are pursuing a variety of strategic options for the business going forward. Perhaps you could just share your expertise with us really with regard to how do you think about valuation for businesses like McGraw-Hill Education?

早安，是的，我是 Jefferies 的 David Reynolds。我想問一個關於 McGraw-Hill Education 的問題。很明顯你們正在為該業務未來推進多種策略選項。也許你可以分享一下你們的專業見解：你們如何看待像 McGraw-Hill Education 這類企業的估值？

Well, first of all, if you take a look at the overall appetite and the need and the criticality of it. And the second one, take a look at the industries serving it, on that part. McGraw-Hill Education is one of the most comprehensive and most powerful scaled capabilities. As we are going through some very, very interesting changes in terms of the digital composition and how education is being focused on both at the higher education and at the advanced level, as well as in the elementary, secondary school area, you are seeing some fundamental change taking place.

嗯，首先，如果你看整體的需求偏好、需求程度以及其關鍵性。第二，看看服務該需求的產業。McGraw-Hill Education 擁有最全面、最強大且具規模的能力之一。隨著我們正經歷一些非常、非常有趣的變化，包含數位組成以及教育在高等教育與進階層級、以及小學與中學領域的聚焦方式，你會看到一些根本性的變革正在發生。

Ours is is that with McGraw-Hill Education, the digital transformation, has to be accelerated. We have to continue to push aggressively on that, and as an industry, you are seeing that. I think that our capability and the team that we have got we have been able to demonstrate making that kind of change more rapidly. And I think that judgment of anybody in the industry is going to be on their ability to develop digital product very, very quickly and comprehensively.

我們的看法是，對 McGraw-Hill Education 而言，數位轉型必須加速。我們必須持續積極推進，而整個產業也正呈現這樣的趨勢。我認為我們的能力以及我們的團隊，已經能夠證明可以更快速地推動這類變革。我也認為，產業內任何人的評價，將取決於他們能否非常快速且全面地開發數位產品。

And could I just follow that up? How critical do you believe is the internationalization of your Education business strategically going forward?

我可以再追問一下嗎？你認為你們教育業務的國際化，在未來策略上有多關鍵？

I think it's very important. And especially when you're talking about emerging markets. Two-thirds of world GDP growth is coming from something called emerging markets and our ability to be able to interface with that and in particular on the Professional and Higher Ed side, it's going to be a big component of growth going forward.

我認為非常重要。尤其當你談到新興市場時。全球 GDP 成長的三分之二來自所謂的新興市場，而我們能否與之對接，特別是在專業與高等教育端，將會是未來成長的重要組成。

That's great. Thanks so much.

太好了。非常感謝。

That concludes this morning's call. A PDF version of the presenter's slides is available now for downloading from www.McGraw-Hill.com. A replay of this call including the Q&A session will be available in about two hours. The replay will be maintained on McGraw-Hill's website for 12 months from today and for one month from today by telephone.

今天早上的電話會議到此結束。簡報者投影片的 PDF 版本現已可從 www.McGraw-Hill.com 下載。包含問答環節的本次電話會議重播將於約兩小時後提供。重播將自今日起在 McGraw-Hill 網站保留 12 個月，並自今日起透過電話保留一個月。

On behalf of The McGraw-Hill Companies, we thank you for participating and wish you good day.

我謹代表 The McGraw-Hill Companies，感謝各位參與，祝各位有美好的一天。