Item 1. Business The Registrant, incorporated in December 1925, serves business, professional and educational markets around the world with information products and services. Key markets include finance, business, education, law, construction, medical and health, computers and communications, aerospace and defense. As a multimedia publishing and information company, the Registrant employs a broad range of media, including books, magazines, newsletters, software, on-line data services, CD-ROMs, facsimile and television broadcasting. Most of the Registrant's products and services face substantial competition from a variety of sources.
The Registrant's 15,661 employees are located worldwide. They perform the vital functions of analyzing the nature of changing demands for information and of channeling the resources necessary to fill those demands. By virtue of the numerous copyrights and licensing, trade, and other agreements, which are essential to such a business, the Registrant is able to collect, compile, and disseminate this information. Substantially all book manufacturing and magazine printing is handled through a number of independent contractors. The Registrant's principal raw material is paper, and the Registrant has assured sources of supply, at competitive prices, adequate for its business needs.
Descriptions of the company's principal products, broad services and markets, and significant achievements are hereby incorporated by reference from Exhibit (13), pages 2 and 3 and pages 7 through 22 (textual material) of the Registrant's 1993 Annual Report to Shareholders.
Information as to Industry Segments The relative contribution of the industry segments of the Registrant and its subsidiaries to operating revenue and operating profit and geographic information for the three years ended December 31, 1993 and the identifiable assets of each segment at the end of each year, are included in Exhibit (13), on page 38 and page 39 in the Registrant's 1993 Annual Report to Shareholders and is hereby incorporated by reference.
Impact of Change In Segments In 1993, the Registrant realigned its segments to combine the Broadcasting and Information and Publication Services segments and Tower Group International into one segment, Information and Media Services.
The Registrant's segments are: (1) Information and Media Services, which includes Broadcasting, all of the company's publications, construction information products and Tower Group International; (2) Educational and Professional Publishing, which includes College, professional and legal publishing and now also includes the Macmillan/McGraw-Hill School Publishing Company. The Registrant acquired the remaining 50% of the Macmillan/McGraw-Hill School Publishing Company from its partner in October 1993 and (3) Financial Services, which includes the Standard & Poor's Ratings Group and all of the Registrant's Financial Information Services.
A summary of the company's revenue and operating profit (unaudited) for the realigned segments by quarter for the years 1993 and 1992 follows:
Item 2.
Item 2. Properties
The Registrant leases office facilities at 394 locations, 322 are in the United States. In addition, the Registrant owns real property at 25 locations; 22 are in the United States. The principal facilities of the Registrant are as follows:
The Registrant's major lease covers space in its headquarters building in New York City. The building is owned by Rock-McGraw, Inc., a corporation in which the Registrant and Rockefeller Group, Inc. are the sole shareholders. The Registrant occupies approximately 950,000 square feet of the rentable space under a 30-year lease which includes renewal options for two additional 15- year periods. In addition, the Registrant subleases for its own account approximately 693,000 square feet of space for periods up to 25 years.
The largest complex owned by the Registrant is located in Highstown, NJ where a book distribution center and offices for accounting operations, data processing services, order fulfillment and other service departments are housed. The Registrant plans to consolidate its domestic book distribution operations by centralizing the distribution operations in Blue Ridge Summit, PA and Hightstown, NJ to Columbus and Blacklick, OH.
Item 3.
Item 3. Legal Proceedings While the Registrant and its subsidiaries are defendants in numerous legal proceedings in the United States and abroad, neither the Registrant nor its subsidiaries are a party to, nor are any of their properties subject to, any known material pending legal proceedings which Registrant believes will result in a material adverse effect on Registrant's financial statements or business operations.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of Registant's security holders during the last quarter of the period covered by this Report.
Executive Officers of Registrant
All of the above executive officers of the Registrant have been full-time employees of the Registrant for more than five years except for Thomas J. Kilkenny.
Mr. Kilkenny, prior to his becoming an officer of the Registrant on December 1, 1993, was a director of the Registrant's Corporate Audit Department since October 1, 1991. Previously he was with Ernst & Young from 1980 through 1991.
PART II
Item 5.
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
The approximate number of holders of the Company's common stock as of February 28, 1994 was 5,724.
Information concerning other matters is incorporated herein by reference from Exhibit (13), from page 46 of the 1993 Annual Report to Shareholders.
Item 6.
Item 6. Selected Financial Data Incorporated herein by reference from Exhibit (13), from the 1993 Annual Report to Shareholders, page 30 and page 31.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Incorporated herein by reference from Exhibit (13), from the 1993 Annual Report to Shareholders, pages 24 to 29 and page 32.
Item 8.
Item 8. Consolidated Financial Statements and Supplementary Data
Incorporated herein by reference from Exhibit (13), from the 1993 Annual Report to Shareholders, pages 33 to 44 and page 46.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Information concerning directors is incorporated herein by reference from the Registrant's definitive proxy statement dated March 21, 1994 for the annual meeting of shareholders to be held on April 27, 1994.
Item 11.
Item 11. Executive Compensation
Incorporated herein by reference from the Registrant's definitive proxy statement dated March 21, 1994 for the annual meeting of shareholders to be held on April 27, 1994.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated herein by reference from the Registrant's definitive proxy statement dated March 21, 1994 for the annual meeting of shareholders to be held April 27, 1994.
Item 13.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference from the Registrant's definitive proxy statement dated March 21, 1994 for the annual meeting of shareholders to be held April 27, 1994.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
2. Financial Statement Schedules.
McGraw-Hill, Inc. And Financial Statement Schedules
All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.
The financial statements listed in the above index which are included in the Annual Report to Shareholders for the year ended December 31, 1993 are hereby incorporated by reference in Exhibit (13). With the exception of the pages listed in the above index, the 1993 Annual Report to Shareholders is not to be deemed filed as part of Item 14 (a)(1).
(a) (3) Exhibits.
A report on Form 8-K/A No. 1 was filed on October 27, 1993. Item 7 was reported in said report on Form 8-K/A. The unaudited interim balance sheet of the Macmillan/McGraw-Hill School Publishing Company as of September 30, 1993 and the related unaudited statements of income and cash flows for the nine month period ended September 30, 1993 were incorporated by reference in said report on Form 8-K/A. The pro forma statements of income reflecting the acquisition by the Registrant of the additional 50% of the Macmillan/McGraw-Hill School Publishing Company were filed in said report on Form 8-K/A.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
McGraw-Hill, Inc. - ----------------- Registrant
By: /s/ ROBERT N. LANDES -------------------------------- Robert N. Landes Executive Vice President, Secretary and General Counsel March 30, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on March 30, 1994 on behalf of Registrant by the following persons who signed in the capacities as set forth below under their respective names. Registrant's board of directors is comprised of fifteen members and the signatures set forth below of individual board members, constitute at least a majority of such board.
/s/ JOSEPH L. DIONNE -------------------------------- Joseph L. Dionne Chairman and Chief Executive Officer Director
/s/ HAROLD McGRAW III -------------------------------- Harold McGraw III President and Chief Operating Officer Director
/s/ ROBERT J. BAHASH -------------------------------- Robert J. Bahash Executive Vice President and Chief Financial Officer
/s/ THOMAS J. KILKENNY -------------------------------- Thomas J. Kilkenny Vice President and Controller
/s/ VARTAN GREGORIAN -------------------------------- Vartan Gregorian Director
/s/ JOHN T. HARTLEY -------------------------------- John T. Hartley Director
/s/ GEORGE B. HARVEY -------------------------------- George B. Harvey Director
/s/ RICHARD H. JENRETTE -------------------------------- Richard H. Jenrette Director
/s/ DON JOHNSTON -------------------------------- Don Johnston Director
/s/ PETER O. LAWSON-JOHNSTON -------------------------------- Peter O. Lawson-Johnston Director
/s/ LINDA KOCH LORIMER -------------------------------- Linda Koch Lorimer Director
/s/ DAVID L. LUKE III -------------------------------- David L. Luke III Director
/s/ JOHN L. McGRAW -------------------------------- John L. McGraw Director
/s/ LOIS D. RICE -------------------------------- Lois D. Rice Director
/s/ PAUL J. RIZZO -------------------------------- Paul J. Rizzo Director
/s/ JAMES H. ROSS -------------------------------- James H. Ross Director
/s/ ALVA O. WAY -------------------------------- Alva O. Way Director
Exhibit Index