The McGraw-Hill Companies Reports 11.9% Growth in 2nd Quarter
Non-transaction revenue, which includes annual contracts, surveillance fees, and a royalty from McGraw-Hill Financial for the right to use and distribute S&P content, grew by 11.1% to $284.6 million in the second quarter of 2011 compared to the same period last year. Royalty revenue in the second quarter was $15.5 million compared to $13.8 million for the same period in 2010. Non-transaction revenue also benefited from growth in new corporate credits under surveillance; gains at CRISIL, S&P's majority-owned company in India; and in non-issue based analytical services, which offset a decline in structured finance surveillance primarily related to defaults and maturing deals. Non-transaction revenue produced 59.3% of Standard & Poor's total revenue in the second quarter of 2011 compared to 63.2% for the same period last year.
In international markets, Standard & Poor's revenue grew by 29.9% to $233.9 million and represented 48.7% of the segment's total revenue in the second quarter, versus 44.5% for the same period last year. All international regions -- Asia, Canada, Europe, Latin America -- produced solid gains.
Education: Revenue for this segment decreased by 5.0% to $536.6 million and operating profit declined by 18.3% to $42.2 million in the second quarter of 2011 compared to the same period last year. Foreign exchange rates increased revenue by $5.8 million and had an immaterial impact on operating profit.
The McGraw-Hill School Education Group's revenue decreased by 10.1% to $292.2 million in the second quarter, reflecting declines in both the state new adoption market and open territory. Results in the second quarter were significantly affected by the timing of 2011 orders from Texas, and compounded by a challenging comparison created by the McGraw-Hill School Education Group's success in last year's reading and literature adoption in Texas. In 2010, the McGraw-Hill School Education Group captured approximately 40% of the available dollars in Texas for reading and 18% for literature.