The Corporation celebrated several important milestones in 2007.
Harold McGraw III commemorates the 10th anniversary of the
partnership between Standard & Poor's and the Taiwan Ratings
Corporation (left); Dubuque, Iowa Mayor Roy Buol and Mr. McGraw
cut the ribbon to dedicate the Corporation's new state-of-the-art
Higher Education facility (center); At an employee forum, Mr. McGraw
celebrates the Corporation's top-10 designation as one of Working
Mother magazine's 100 Best Companies (right).
Since 1996, we have returned $8.4 billion to our shareholders through stock buybacks and dividends, a long-term record that underscores our commitment to you.
Focused on Solutions for Critical Issues
The disruption in the world's credit markets has led to scrutiny
of the actions and capabilities of many market participants,
including credit ratings firms.
Standard & Poor's is taking a leadership role in addressing the issues that arose in 2007 and has launched a series of important initiatives to enhance the ratings process in four key areas:
>> Governance: further ensuring the independence and integrity of our ratings opinions.
>> Analytics: enhancing the quality of our credit ratings.
>> Information: providing increased transparency to market participants.
>> Education: improving the public's understanding of the ratings process and how ratings opinions should be used.
To develop these actions, we conducted a comprehensive assessment of S&P's governance and analytical policies and practices. We also worked with financial market experts and engaged in dialogue with global market participants, regulators and legislators. S&P is currently implementing these enhancements and will continue to develop and introduce further measures as needed.
Our goal in taking these steps is not only to enhance S&P's governance and controls, but also to minimize even the potential for perceived conflicts of interest, providing a greater understanding of how S&P's ratings are determined, what they mean, and how they are affected by market trends and events.
Credit ratings play a vital role in the capital formation process, and S&P has a long track record of helping investors assess credit risk. By strengthening the ratings process and increasing transparency, we will serve the public interest by building greater confidence in credit ratings for global markets.
Focusing on Another Year of Growth
Entering 2008, we expect to achieve another year of growth,
although at a slower pace than in 2007. We anticipate that the
economy and conditions in the credit markets will begin to
improve later in the year, and we are ready to capitalize on all
available opportunities.
To prepare us for the year ahead, we restructured certain business operations in the fourth quarter of 2007, consistent with our efforts to streamline operations and lower costs. The steps we took resulted in a 3% reduction in our workforce, and while the decision to reduce staff is never easy, we believe these steps will strengthen our efficiency.
Global expansion remains a priority. International revenue represented 26% of our total revenue in 2007. We expect that international revenue will continue to increase in the years ahead, with all three business segments contributing to our growing diversification.
McGraw-Hill Education had substantial accomplishments in 2007, and is well positioned for further growth in 2008. In 2007, the School Education Group captured a market-leading 32% share of the state new adoption market. We achieved strong results across the K-5 and 6-12 markets, increasing revenue by 6.8% in an industry that grew 2.7%.
