Morning and welcome to The McGraw Hill Companies, Inc. 2011 Annual Shareholders Meeting. The meeting is being conducted at McGraw Hill's International Headquarters in New York City. At this time, I would like to inform you that the call is being recorded for broadcast and that all participants are on a listen-only mode. If during the call you need assistance, please press star and zero. If any listener needs the volume increased or decreased, please press star zero and I will assist you. This call is being webcast from The McGraw Hill Companies' website and will be available for replay about two hours after the meeting ends, both by phone and on the web. To do that, go to the company's homepage at www.mcgraw-hill.com and click on the link for the Annual Shareholders Meeting. I'll repeat the website address. It is www.mcgraw-hill.com.
I will now turn the meeting over to Harold McGraw III, Chairman, President, and Chief Executive Officer of The McGraw Hill Companies. Thank you again for participating. We will now proceed.
Okay, just one quick sec. Do we have the connections are on me? Perfect. Okay. Good morning, everybody. I'm Harold McGraw III. I'm Chairman, President, and Chief Executive Officer of The McGraw Hill Companies. It's my pleasure to welcome you to our 2011 Shareholders Meeting. It's now 11:00 A.M., and I call the meeting to order. We've been waiting on some of the connections. We have quite a few people, literally, around the world that are on teleconference and on webcast and on the internet that are listening in. For those that are listening in, we thank you for caring about the company and thank you for taking the time to be with us. I'd like to introduce you to the two gentlemen at the table here. Obviously, Ken Vittor has been our General Counsel. Ken, welcome. Jack Callahan is our Chief Financial Officer.
Jack is fairly new to the company, and we're very excited about Jack being a part of the team. He came from a background at General Electric, where he had numerous operating and financial opportunities there, and then at PepsiCo and then at Dean Foods. Now he's home. We'll hear from him in just a little bit on that one. It's now my pleasure to introduce our Board of Directors. We have a world-class board whose dedication, expertise, and leadership are a tremendous source of pride for the corporation. I kindly ask our Directors to stand as I say their names and to remain standing and please hold your applause until all have been introduced. By the way, in the proxy material and the annual report, there's more detailed information on each of them, and I commend you to take a look. First is Pedro Aspe.
He's the Co-Chairman of Evercore Partners. He's the Chairman of Protego. He's the former Finance Minister of the country of Mexico. Next is Sir Win Bischoff. He's the Chairman of Lloyd's Banking Group. Douglas N. Daft, retired Chairman and Chief Executive Officer of Coca-Cola. Linda Koch Lorimer, Vice President and Secretary, Yale University. Robert P. McGraw, Chairman and Chief Executive Officer of Aberdale Holdings, LLC. Hilda Ochoa-Brillembourg, President and Chief Executive Officer of Strategic Investment Group. Edward B. Rust, Jr. He's Chairman, President, and Chief Executive Officer of State Farm Insurance Companies. He's also our Presiding Director. Kirk Schmoke, Dean, Howard University School of Law. Sidney Taurel, Chairman Emeritus, Eli Lilly and Company. Also, we have two Directors that could not be with us today. Sir Michael Rake, who's the Chairman of BT, had a very serious accident. The good news, he's recovering well.
It'll take some time, but, you know, we miss him. The other Director is Bill Green, who is the Chairman of Accenture. Bill just joined our Board, and he had a prior commitment when he joined, and we understood that. You know, he's going to add to our distinguished Board as well. We miss Bill. Our Board of Directors. In our annual report on page 17, we have a special tribute. It's entitled The Passing of a Visionary, to our Chairman Emeritus, my father, in recognition of his total dedication and devotion to the companies. In his honor, we have named this auditorium and gallery the Harold W. McGraw, Jr., Auditorium and Gallery. We also have a number of retired Directors and Executives that are with us today, and I'd like to mention some of them here for you.
First of all, it's always nice and, you know, my predecessor, Chairman Joe DeAnn and his wife, Katherine, are here. Joe? Lois Rice? It's great to see Peter Lawson-Johnson here. Yeah? Tom Sullivan and his wife, Salsie. Tom? And Bob Evans. Bob, thank you for being here. I'd also like to welcome, from around the world, the S&P Independent Board of Directors that have been here a couple of days and have been with us, and I thank you for being here as well. I've already introduced Jack and Ken. Let me introduce then the other members of the Senior Management Team, and if they would please stand as I say their names. Bob Bahash, President, McGraw Hill Education. Lou Eccleston, President, McGraw Hill Financial. Glenn Goldberg, President, McGraw Hill Information & Media. Devin Sharma, President, Standard & Poor’s. John Berisford, Executive Vice President, Human Resources.
Ted Smyth, Executive Vice President, Corporate Affairs and Executive Assistant to the Chairman. And Charles Teschner, Executive Vice President, Global Strategy. Thank you, Jeff. Now that I've introduced our leaders of today, it's always fun to pick on some of our leaders of tomorrow. We have so much wonderful talent here at The McGraw Hill Companies in so many ways, and we attract talent in a variety of ways in a variety of our businesses. In the corporate area, we have a management development program, and we look for some of the very best and brightest to join us. We have two new people to introduce to you that are going to be coming to the corporation, I hope, very soon. From MIT Sloan School of Management, Amanda Rotier. If you'd stand. Amanda, good to see you. From the University of Chicago Booth School of Business, Jennifer Ku. Thank you, Jennifer.
What we like to do is give you the attention up front, okay? The work comes on that one. Welcome. We will now proceed to the business of our annual meeting, the purpose of which is sevenfold. One, to review our 2010 operations and to look at our prospect for 2011 and beyond. To elect 12 Directors. To amend the company's restated certificate of incorporation to permit shareholders to call a special meeting of shareholders. Four, is to approve on an advisory basis the executive compensation program for the company's named executive officers. Five, to vote on an advisory basis on how often the company will conduct an advisory vote on executive compensation. Six, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2011.
Seven, to vote on a shareholder proposal and to take up any other matter that may properly come before the meeting. Mr. Vittor will establish that the meeting is duly called, that a quorum is present, and that other formalities have been complied with. After Mr. Vittor advises that we have a quorum, we will proceed with the matters that we just listed. Ken.
Thanks, Terry. Before we begin, let me provide certain cautionary remarks about forward-looking statements that may be made during this annual meeting. Except for historical information, the matters discussed during this meeting may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, 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 the results anticipated in these forward-looking statements. We direct listeners and the audience to the cautionary statements contained in our Form 10-Ks, 10-Qs, and other periodic reports filed with the U.S. Securities and Exchange Commission. The Corporate Secretary, Mr.
Scott Bennett, has advised me that we have certified lists of shareholders of record as of the close of business on March 7, 2011, who are entitled to vote at this annual shareholders' meeting. Such lists have been opened for inspection by shareholders. We also have copies of the notice of meeting, proxy materials, annual report, and affidavits of mailing relating to this annual meeting. The affidavits will be filed with the records of the annual meeting. The Board of Directors has designated two representatives of BNY Mellon Share Owners Services to act as inspectors of election for the annual meeting. Representatives of BNY Mellon Share Owners Services are present and have been duly sworn. Their oaths will be duly filed. In addition, I'm advised by Mr.
Bennett that shares of common stock representing approximately 87% of the outstanding shares of S&P Global and representing more than the majority of the votes entitled to be cast at this annual meeting are represented either in person or by proxy. Mr. Chairman, the annual meeting has been duly convened. A quorum is present, and the business of the annual meeting should proceed.
Thank you, Ken. We will now proceed with the election of Directors and the other formal business items. Ballots will be distributed to those who want to vote in person on any of the proposals. We will vote on each proposal before taking up the next. Time will be provided for specific questions relating to each of the proposals as they are introduced. Further time will be provided following the annual report on operations for questions on any other matters. I would request that all remarks concerning the formal business items be directed to the Chair. In order that the remarks from the floor may be heard, we have microphones on either side. If that's not convenient, we have a handheld microphone for you. Just raise your hand. If you have a question or remark, please state your name and whether you're a shareholder or whether you're representing a shareholder.
As a matter of courtesy, please limit yourself to one question or remark until anybody who wishes to do so has had an opportunity. Okay. The first item to be voted upon is the election of 12 Directors. We present as nominees for election as Director the 12 persons named in the proxy statement dated March 18, 2011. The names of the 12 Directors nominated for election are: Pedro Aspe, Sir Win Bischoff, Douglas N. Daft, Bill Green, Linda Koch Lorimer, Harold McGraw III, Robert P. McGraw, Hilda Ochoa-Brillembourg, Sir Michael Rake, Edward B. Rust, Jr., Kirk Schmoke, and Sidney Taurel. The floor is now open for questions or comments on the Directors.
Thank you. My name is Kenneth Steiner. I own 2,000 shares. I've been a shareholder for a very long time. My first comment is a suggestion. I know it's been brought up in the past, I believe very strongly that we should have an independent Chairman of the Board at this company. I support it as a general matter of corporate governance. I think that if we had an independent Chairman, the shareholders would have somebody directly responsible to them, completely independent of management. I know it's been brought up in the past. I wanted to know if it's been given any additional consideration. That's one question. The second question pertains to the Board also. I want to know whether the Board has considered at all any merger acquisition activity or divestitures recently.
We've seen many companies like ITT, Marathon Oil, and others that have engaged in breaking up the company into various components, and the stock has gone up significantly. I believe here at this company, we have several different operations with minimal or no synergies. There's been very little growth in revenue and earnings over the last five years, and the stock price is lower than it was 10 years ago. I want to know what kind of value-enhancing activities this Board has considered in the last year to try and get the stock up. I understand that's not completely or sometimes even partially in your control, but I think that after 10 years of stagnation, some consideration should be taken to breaking up the company, splitting it up, and spinning it off to the shareholders. I wanted to know if the Board has considered that at all.
I know there's certain information you may not be able to disclose, but in general, these are the kind of things that the Board looks at. I would recommend it myself.
Thank you, Mr. Steiner. The answer to your question in both cases is the Board of Directors. In the first case, I personally believe that the Chairman, President, and CEO is important because you have to be able to be the spokesman for the corporation, and you have to be able to address all the issues associated with that. I believe that representing the company in that, that doesn't matter. The Board of Directors makes that decision. Believe me, all of those kinds of considerations are considered on that one. In the second one, I'm not sure you've got your facts right. From a financial standpoint, you know the corporation has provided enormous shareholder return.
You know it's really, you know in 2008, 2009, the economic downturn and the financial crisis and being affected by some of the things associated with that, that we've had some disappointment in the share price. As far as anything having to do with acquisitions, dispositions, any of all of those kinds of things, you know that is a management recommendation to the board, and the board makes those decisions. I'm very, very comfortable and confident that the Board of Directors takes very seriously both of those issues that you have commented on. I think that suffices. Okay. Any other comments? Questions? Since there's no further discussion on this proposal, I declare the voting closed on this item. The second item to be voted upon is the proposal to amend the company's restated certificate of incorporation to permit shareholders to call special meetings of shareholders.
Our board has approved and recommends that you approve an amendment to Article 8 of our restated certificate of incorporation that would permit special meetings of the shareholders of the company to be called at the request of shareholders who own at least 25% of the voting power of the issued and outstanding stock of the company. The floor is now open for comments and questions on the special meeting proposal. Since there's no further discussion on this proposal, I declare the voting closed on this item. The third item to be voted upon is the proposal to approve on an advisory basis the executive compensation program for the company's named executives. The floor is now open for questions or comments relating to this item. Since there's no further discussion on this proposal, I declare the voting closed on this item.
The fourth item is to vote on an advisory basis on how often the company will conduct an advisory vote on executive compensation. The floor is open for questions or comments here. Since there's no further discussion on this proposal, I declare the voting closed on this item. The fifth item to be voted upon is the ratification of the selection of Ernst & Young LLP as the company's independent registered public accounting firm for 2011. Ms. Denise Pelley and Mr. Ken Egan, partners of Ernst & Young, responsible for The McGraw Hill Companies account, are present today at the meeting. They are available now if you wish to ask them any question about their firm or about the financial statements of The McGraw Hill Companies.
The specific proposal is as follows: resolve that the selection by the Board of Directors of Ernst & Young LLP to serve as the independent registered public accounting firm of the company and its subsidiaries for 2011 be and hereby is ratified and approved. The floor is now open for any questions and comments regarding the selection of Ernst & Young. Since there's no further discussion on this proposal, I declare the voting closed on this item. The sixth item to be voted upon is a shareholder proposal requesting shareholder action by written consent. I understand that Mr. Kenneth Steiner is prepared to present this proposal, which is set forth on page 74 of your proxy statement.
The shareholder proposal and supporting statement, for which the board and the company accept no responsibility, reads as follows: resolves, shareholders hereby request that our Board of Directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting of which all shareholders entitled to vote thereon were present and voting. That is, of course, to the fullest extent permitted by the law. I would like to give Mr. Steiner an opportunity to make a statement in support of his proposal.
Thank you, Mr. Chairman. I also point out that a lot of my proposals have been adopted in the past by management, and this would be one more that I think would be productive for the Board to adopt next year, hopefully under their own recommendation. It got a large vote last year. I believe that taking action by written consent in a local meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle. I think it should be taken in the context of the need for improvement in the company's corporate governance status, which is in the proxy. I won't go through it. Anybody interested can review it. The revision of what I asked you before is you didn't really tell me whether the Board had considered breaking up with the company or spin-offs or anything.
I don't believe, I don't agree with you that value has been created. The stock is still 30 points over time. It's at the same level it was at 10 years ago, and there's been minimal growth in revenue or earnings.
Mr. Steiner, I think we better stay focused on this proposal.
That was one reason to have a shareholder action by written consent. Thank you.
Okay. First of all, Mr. Steiner, thank you. The Board has considered the written consent proposal and does not agree with it and recommends a vote against this proposal. Detailed reasons for this recommendation you will find in your proxy statement. Importantly, the Board believes that this proposal is just not necessary since item two of this proxy statement seeks to amend the company's restated certificate of incorporation to provide that special meetings of shareholders do exist but may be called at the request of holders of 25% of the outstanding shares of the company's stock. The provision would allow such holders to have these kinds of actions and meetings, and therefore, we don't believe that this adds any material value to the process. The floor is now open for any other questions or comments newly with the written proposal.
Since there's no further discussion on the proposal, I declare the voting closed on this item. This concludes the voting on all the formal business items. The ballots now will be collected and processed. If you've already voted by internet, telephone, or by proxy, you obviously don't have to vote again. The votes will now be counted, and we'll present those in just a minute. Okay. While we're doing that, let me welcome you all again to McGraw Hill's 2011 annual meeting. It's always a very, very good time to be together, the start of the year, and it's off to a very good start. I hope you had an opportunity to take a look at some of the innovation and creativity and the people that did it in terms of the digital expo.
It'll be open afterwards as well, and I hope you have an opportunity to take a look at some of that. Clearly, we're in the midst of enormous change with technology transforming our world in ways that we, in many ways, never thought possible. What that means is that companies can produce more with less. Virtually any job can be done virtually, anywhere. The best opportunities go to students and workers with the best educations. Today, we convene at a critical moment in the history of our global economy. Around the world, developed countries are still recovering from the Great Recession. In the U.S., the recovery has been slower than we had hoped. Thankfully, unemployment finally dipped below 9% earlier this year, but that's not very satisfying. In the months ahead, deficits will continue to pose a major challenge for federal, state, and local governments.
As governments slash spending, these cuts will place a damper on economic growth. In total, we expect the American economy to expand about 2.9% this year, which is the same as last year. While developed countries have recovered from the financial crisis more slowly, developing countries are growing far faster. We expect the global economy will expand by about 3.7% in 2011, with emerging markets leading the way. China and India will once again post the best numbers of any major economies, with projected growth rates of 9.5% and 8.3%, respectively, although inflation is a growing concern, obviously, in both of these countries. In the long run, a more sustainable future for the global economy will depend on addressing complex challenges such as rising deficits and trade imbalances. These challenges are larger than any individual country, and therefore, the solutions will be as well.
Now more than ever, prosperity in the U.S. depends on participation in the growth of markets abroad. The global economy is not a zero-sum game because the global economy, as we all know, focuses on the commodity that will most determine every country's success, and that is knowledge. Knowledge is a renewable and constantly growing resource. This is why you should be very excited about the prospects for McGraw Hil l Companies. At McGraw Hil l, we have a vision for a smarter, better world where everyone can succeed in the knowledge economy. It's a vision for translating unprecedented amounts of data that are generated into genuine insights and actionable information. It is a vision for sharing these insights with more people in more countries than ever before.
It's a vision that unites every part of our company, from credit ratings of Standard & Poor’s to the investment services of the new McGraw Hill Financial , to the digital learning technologies of McGraw Hill Education, to the real-time business intelligence of Platts, J.D. Power, and our other information and media brands. It is true that different countries will always have different needs. We know that there is one need that will be universal, and that is obviously the need for knowledge. I will return to this theme in a minute. First, allow me to discuss how this boosted our financial performance this past year. It was an important year of achievement. In 2010, we posted double-digit earnings per share growth, and we maintained the rock-solid financial position that investors have come to expect from McGraw Hill . To start 2011, we increased our annual dividend for an amazing 38 consecutive years.
It is a record that fewer than 25 companies in the S&P 500 have achieved. In the months ahead, we expect to build on these outstanding achievements with another year of strong growth in the markets around the world. Altogether, we have projected diluted earnings per share of $2.79 to $2.89 for 2011. We're already off to a very good start. Yesterday, we announced our earnings for the first quarter. They were $0.39 diluted earnings per share. That's an 18.2% increase in the EPS on a 7.7% revenue base. It was led by our newest segment, McGraw Hill Financial, and our Information & Media. We're very pleased with the start of that. Now, to give you just a little bit more information in terms of how that all came together and for 2010, let me turn it over to Jack Callahan, our Chief Financial Officer.
Thank you, Terry. It is indeed a pleasure for me to be representing The McGraw Hill Companies in my first shareholder meeting here today. I want to cover three things this morning. First, I want to review the strong year the company had in 2010, then remind you of the very strong financial position we are now in, and lastly, discuss the solid start to 2011 based on our Q1 earnings that were released yesterday. Let's start looking back to 2010. Adjusted earnings per share in 2010 were $2.69, excluding the impact of one-time items. Our second-best year ever from an EPS point of view. More importantly, the year marked a return to profit growth close to 14% after two years of decline in 2008 and 2009.
Clearly, we are demonstrating the resiliency and power of the broad portfolio of products and services as we began to emerge from the challenges of the recent financial crisis. Let's review the consolidated P&L performance. Revenue was approximately $6.17 billion, up 3.6% versus 2009. The organic top-line growth was a bit better at 5.3% as the overall results were impacted by the divestiture of BusinessWeek. There was strong cost control across the organization as there was limited expense growth across segments. Overall, the consolidated segment margins expanded 240 basis points to drive adjusted operating profits of approximately $1.6 billion, up over 14%. Adjusted earnings per share were generally in line with these strong segment operating profits with growth approaching 14%. The performance across the segments did vary in 2010.
McGraw Hill Financial, which just became a standalone segment in 2011, had solid top-line growth at 6% with profits that were down modestly last year. However, as you may have heard from the first quarter results released yesterday, McGraw Hill Financial started 2011 very strong with over 16% revenue growth and profits that were up by over a third. We anticipate a double-digit top-line and bottom-line growth for the full year, and we're very excited about the long-term prospects for this new segment. Last year, Standard & Poor’s returned to growth, aided in part by a real step up in the issuance of corporate debt, particularly high yield. Top-line growth was close to 11% with profits approaching 7%.
We are investing in this business to strengthen capability and address regulatory requirements, which continues to constrain margins a bit going into this year, but we anticipate accelerated profit performance over the balance of the year. Information & Media, excluding the impact of BusinessWeek, had a top-line growth just over 6%, as strong growth performance at Platts offset challenges in the construction and automobile markets. Bottom-line performance was exceptional, as profits close to doubled last year, and I&M is off to a very strong start in 2011. Education revenues were up close to 2% in a very challenging market. Profits were up 25% last year. Going into 2011, we do anticipate profits in Education declining somewhat as we are making investments to accelerate the transition to an ever more digital range of products and services.
As an observation, the profit growth algorithm was a bit unusual in 2010, as I&M and Education drove much of the overall growth. In 2011, we anticipate a larger contribution to growth from both Standard & Poor’s and McGraw Hill Financial. 2010 was another year of robust cash flow performance. Cash from operations was strong at close to $1.5 billion, and we continued to reinvest back into the business. We continued to increase dividends. In 2010, the dividend was increased 4.4%. Looking forward into 2011, we announced earlier this year a 6.4% increase in the annual dividend to $1 a share. Our free cash flow in 2010 after dividends was over $880 million. Over 70% of this free cash flow was used for acquisitions, most notably The Markets Integrity, and to repurchase shares on the open market. We did leverage this strong cash flow to further strengthen our strong cash positions.
Cash and short-term investments at the end of 2010 totaled approximately $1.5 billion, up from $1.2 billion at the end of 2009. Gross debt comprised of long-term unsecured senior notes was $1.2 billion. Therefore, the company ended the year in a very strong financial position entering 2011 with this real strength. Turning to 2011, as Terry mentioned a moment ago, we announced our first quarter earnings yesterday, and the company is off to a very solid start. We posted strong top-line growth, close to 8%, our best result in quite some time based on double-digit revenue growth across three of our four segments: McGraw Hill Financial, Standard & Poor’s, and I&M. Earnings per share growth was even stronger at 18%. Good way to start the year. Note that this is our sixth consecutive quarter of growth, both top-line and bottom-line, that started late in 2009.
We intend to maintain this growth momentum throughout 2011 as we are very much on track with our full-year guidance of mid-single-digit revenue growth, EPS of $2.79- $2.89, 4% to 7% growth, and another year of strong free cash flow over $700 million that we will use for select acquisitions, added strength to the balance sheet, and targeted share repurchases. This completes my recap of the 2010 result and this first look into 2011, which you can see is off to a very promising start. Now, let me turn it back over to Terry.
Okay. Thanks, Jack. Before I return to the theme that we were talking about in terms of the knowledge economy and the promise that it has for McGraw Hil l Companies, let me share with you this video about the knowledge economy and our role.
What does it take to succeed in the knowledge economy? We know the knowledge economy is global. We know it's digital. Markets are merging and emerging. We know inspiration is valuable in any language, and that innovation and integrity are desirable in any culture. We know that data makes the world go round, and technology creates connections across space and time. We're meeting global challenges head-on. We're pioneering new markets, reaching new audiences, and responding to an ever-changing world. The knowledge economy is continually evolving. We're providing information people need in real time and creating personalized, engaging, and adaptive experiences. We're promoting college and career readiness, supporting organizations and activities advancing global education, and bringing 21st-century transparency to markets that help businesses turn service into satisfaction and sustainable profit. Everyone can succeed in the knowledge economy.
We're inspiring academic growth for students, inspiring economic growth for professionals, inspiring sustainable growth for markets, inspiring enduring growth for countries. The McGraw Hill Company : Creating a smarter, better world.
Okay. As the world obviously moves from the information side to the knowledge economy, our brands are enabling individuals, companies, and countries to improve 21st-century skills, guidance to investors, and global insights on finance, commodities, and capital markets. We have taken many steps to ensure that we are even more relevant in the fast-changing world. These measures are transforming McGraw Hil l in two very key ways. First, we are transforming to a more digital company. Over the decades, McGraw Hil l has earned a reputation for combining superior content with expansive reach. More recently, we have added another element to the mix. On the technology side, our investments in technology have moved us to the cutting edge of the digital revolution. According to the Association of American Publishers, sales of e-books increased more than 160% last year. This is not an isolated trend.
By next year, we expect the amount of digital data in the world to grow, obviously, dramatically. In a world awash with so much data, people need benchmarks. They need standards that they can trust to make sense of it all. That is where our brands make the difference. We know how to convert data into knowledge. We can personalize information around the needs for our customers so that they can receive the insights they need anytime, anywhere, anyhow. About two-thirds of our business now comes from digital and hybrid products and services. In short, technology is a huge opportunity for McGraw Hil l's future. Second, we are transforming into a more global company. The case for globalization is obvious when you consider that 95% of consumers live outside the U.S. We project that over the next five years, 75% of world economic growth is coming from emerging markets.
If you take a look at the next five years, it is going to be more like 80%. In recent years, I have spent considerable time visiting the world's two largest emerging markets, obviously China and India. I have seen how these countries present unparalleled opportunities for our company. As these markets continue to grow, they will need to increase their supply in two critical forms of capital: human capital and financial capital. As a company at the intersection of education and financial information, McGraw Hil l will play a critical role in meeting these needs. Today, we are expanding rapidly around the world. In 2010, we grew our sales in emerging markets by more than 20%. In addition, more than half of Platts' revenues, for example, comes from outside the U.S., and nearly 50% of S&P's revenue comes from outside the U.S.
By becoming a more global and more digital company, we have an opportunity to serve our customers in ways never before possible. We can reach people in places that once considered unreachable. We can grow globally while catering to local needs. We can create a smarter, better world by building a smarter, better company. Across all four of our business segments, we are positioning ourselves for growth by positioning our customers for success in the knowledge economy. Let's take a look at our segments one by one. At our first segment, Standard & Poor’s, we understand that success in the knowledge economy begins with a stronger, more sustainable financial system. We need a system that combines greater transparency with greater accountability, gives consumers and investors the protections they deserve, ensures a level playing field, and provides businesses with the capital they need to create new jobs and grow our economy.
For over 150 years, S&P has worked to turn this vision into a reality. I'm pleased to report that 2010 was no exception. It was a year when we continued to respond to the lessons of the financial crisis by making our ratings more transparent and more comparable across all different asset classes. It was a year when we worked closely with governments around the world as they enacted new financial regulations, including the Dodd-Frank Act here in the U.S. It was a year when we rapidly adapted to these changes by investing in a control framework called QCCR, which stands for Quality, Criteria, Compliance, and Risk, four individual components separately managed and firewalled from the ratings process. It was a year when we developed new tools for explaining what our ratings mean and how they can help investors.
As clarity has returned to global debt markets, conditions have ripened for growth. In 2010, the corporate high-yield market broke a record for new dollar volume issuance. We forecast favorable conditions again in 2011. Refinancing activity is picking up as companies look to replace existing bonds with cheaper debt. By the way, to be specific, we see $5.6 trillion of refinancing activity between now and the end of 2014. Credit spreads are tightening. Merger and acquisition activity is rising. Deleveraging by banks is spurring growth in public debt markets. Here, we're seeing the development of local bond markets literally around the world. That's what's fueling India, South Africa, Indonesia, Turkey, Korea, Malaysia, and all where we have representation. Investors are showing an increasing appetite for risk. Perhaps most important, confidence continues to improve. The result is higher issuance and higher demand for our ratings.
As we look to the future, our ratings will play an increasingly important role in the developing world. For example, in India, Standard & Poor’s is the majority owner of CRISIL, which is India's leading ratings research, risk, and policy advisory company. In 2005, for example, CRISIL began rating the creditworthiness of small and medium-sized enterprises. Why this is important is in terms of the depth and diversity of a private sector of a country. If you don't have a strong SME, small and medium-sized enterprises, you're not seeing the innovation and the entrepreneurship and the new ideas that are coming. When you see an SME market starting to spring up in a country, that's really telling you about the maturity of their private sector. Between 2005 and 2009, we rated 10,000 SME ratings. In 2010, we did 10,000 ratings alone in things.
Incidentally, from Mumbai, coming in the other day is Roopa Kudva, who is the President of CRISIL. Roopa, are you here? Right back here. Nice to see you, Roopa. This exponential growth shows how ratings can help businesses around the world access the capital they need and to create the new jobs. Just to keep that into perspective, coming out of the World Economic Forum and a McKinsey study, all the growth with the world growing up, the question was, all right, how much capital needs to be raised in these markets in order to be able to fuel this growth? The number was north of $100 trillion over the next 10 years. S&P alone is looking at $70 trillion by the end of 2015. Standard & Poor’s sits right in the heart of the ability to help manage the access to that kind of capital.
At our newest segment, McGraw Hill Financial, we understand that success in the knowledge economy means making smart investments today for a more prosperous tomorrow. When we launched McGraw Hill Financial last year, we had a vision for a business that serves professionals from investment funds to asset managers to bankers. The brands of McGraw Hill Financial include well-known names such as Capital IQ and S&P indices. While these brands were successful on their own, we believe that together they can be more than the sum of the parts or more to the sum of the parts. We began testing this concept a few years ago when we started combining our financial information, data, and analytics on a common marketing and sales platform. The result is something greater than just a billion-dollar-plus business. It is a foundation for innovation and for providing investors with a powerful assessment and analytical platform.
For example, we recently launched a product that has transformed the fixed income market. It's called Risk to Price (R2P). In the wake of the financial crisis, we saw institutional investors struggling with a simple question: Is a bond's return worth its risk? With R2P, we can provide an answer. Using an advanced methodology, Risk to Price scores bonds against each other. The higher the score, the better the investor is being compensated relative to the risk being taken. As a result, investors can make smarter decisions so that they can achieve a better balance between risk and return for their financial needs. Expect more innovation from McGraw Hill Financial in the months ahead. Another huge opportunity that is cropping up from McGraw Hill Financial, and right in the heart of it, is what's going on with the consolidation of exchanges around the world.
As they try to differentiate themselves with product, McGraw Hill Financial sits right in the heart of the ability to provide that differentiation. At our next segment, McGraw Hill Education, we understand that success in the knowledge economy requires lifelong learning. Students and workers need to be constantly updating their skills so they can keep pace with an ever-changing job market. On this front, there's good news and there's bad news. Here's the bad news. We're seeing a growing gap between the skills that students are learning in school and the skills that they need to succeed in the knowledge economy. In the U.S., the problem begins in our K-12 education system, where more than a million students every single year drop out of high school. Among students who do graduate, less than a quarter meets the standards for college readiness. As a result, the U.S.
has fallen from boasting the highest percentage of 25 to 34-year-olds with college degrees, ranking in the middle of the pack. That bodes poorly for America's future, given that more than 60% of all jobs will require post-secondary education by 2018. Already, the unemployment rate for workers with only a high school degree is about twice as high as the rate for workers with a college degree. As we all know, even in this state, youth unemployment under the age of 24 is now over 20% in the U.S. It's 30% in France, 40% in Spain, and it's a growing difficult problem in the skill gap that needs to be narrowed. Now for the good news. Thanks to advances in technology, we have the opportunity of the century to make higher education more effective, more affordable, more accessible, and more adaptive than ever before.
Digital learning is becoming a new frontier of education, and we at McGraw Hill are blazing that trail. Last year in higher education, we experienced double-digit growth for our digital products and services across the board. Take the story of Professor Igor Dolgov, who teaches an introductory psychology course at New Mexico State University. He wanted to give his students a more engaging, more interactive, and more personalized educational experience, so he turned to McGraw Hill's LearnSmart. He says, "The more time students spend with LearnSmart, the better scores they achieve." Message is clear. When students learn smart, they learn more. When they learn more, they do more. To prepare students for the challenge of post-secondary education, we also need to ensure they first receive a world-class education early in life.
While tight state budgets continue to constrain spending for elementary and high school education, I'm pleased to report that we successfully obtained about 30% of the new state adoption market and increased our market share once again in 2010. The U.S. is far from alone in struggling to prepare its workforce of the future for the knowledge economy. Around the world, we're seeing developing nations facing similar challenges, and we're determined to help. Through digitization of education, it will be possible to deliver career training, test preparation to students and workers whenever and wherever. This is a great example of how countries can bring hope to those who otherwise would have no access to quality education. I just reminded that in 2010, when we launched our mobile learning platform for India, India has 700 million cell phones. We're not talking about a new technology.
We're not talking about installing a base. They have 700 million cell phones, and we will use what they've got, and we will provide content through our partner, Wipro, to be able to help students pass those high-stakes tests that get them into the government service work, that get them into the business schools, that get them into the IT sector, and so forth. The digitization of education is proving to be the access point for opening up the future workforce. At our final segment, McGraw Hill Information & Media, we believe that businesses cannot succeed in the knowledge economy with quality products alone. They also need superior market intelligence. At a time when markets are changing by the minute, companies cannot afford to fall behind the curve. They are turning to our brands for real-time information in the fields that will shape the future, from automobiles, aviation, energy, and construction.
We showcased our market leadership last year when Platts transformed the iron ore market for the better. Iron ore is the key ingredient in steel production. It should come as no surprise that it makes up a big part of the $245 billion global steel market. China alone produces more than 500 million metric tons each year as it transforms into an industrial powerhouse. In 2010, a new level of transparency became possible when Platts introduced IODEX, the world's first daily spot market for reference on iron ore. This benchmark has brought pricing for iron ore into the 21st century, and it has reminded people around the world about the secret of our company's success. Our success is labeled as helping people to get to where they need to be. It's all about outreach, and that's what we live.
As I look to the future, I have high expectations for our company because I have high expectations for the markets that we serve. I see a future where students achieve higher standards, where the financial system grows stronger and more sustainable, where businesses can access the capital they need to create the jobs, where knowledge brings light to dark corners of the globe, and where countries can grow in their economies the prosperity and peace that we all desire. In short, I see a smarter, better world where everyone can succeed, and I'm privileged to work alongside more than 24,000 men and women who share this vision for the future. While much has changed over the years, our employees continue to be and always will be our company's greatest asset.
I'm grateful for their insights that they share, for the innovations that they inspire, and for the integrity they show. Together, we made 2010 a year of achievement. Together, we will make 2011 even better. I thank you all for your support and for being here today. Once again, I hope that you do get to see some of the product that these people have developed in terms of making that smarter, better world. Thanks very much. The meeting is now open for questions or comments concerning any subject generally relating to The McGraw Hill Companies. I would request that all questions be directed to me. In order that remarks from the floor, the microphones are on the side, handheld if you need it. Please state your name and whether you're a shareholder or you're representing one, and we're open. All right. It's off the hood.
Chairman, Philip Berman, Portfolio Manager and shareholder. Just some brief comments and questions. As I stated two years ago, MHP stock had bottomed simultaneously with the bottom in the economy and the stock market. A patient MHP investor will be well rewarded as the stock is now poised to rise in a slow and steady fashion in direct proportion to the company's earnings, just as it did the same after the severe 1973-1974 recessions. I'm confident in our Chairman's acute ability to make the difficult decisions necessary to continue to transform the company, which will effectively lead to an increased asset value for the company in this new digital internet-based age. In closing, the McGraw Hil l Company stocks built by our late humble Chairman Emeritus should continue to thrive and excel in the swiftly changing media world's move away from print format and free content.
The stock was a buy in 2009, 2010, and still represents a buying opportunity for long-term-based investors. Now, questions. Last year, on behalf of the White House, you accompanied a select elite group of American business executives to India. Did you in any way change your five-year business plan as a result of that trip?
It's a great question. First of all, thank you for your comments on that one. You know, transformation has a velocity to it. When you were talking back into the 1973, 1974 crisis, during that period, you know, 60% of our revenues came from advertising. Today, about 1% of our revenues come from advertising. Again, in terms of the digital transformation that you're talking about, a little over two-thirds of everything we do is now digital or hybrid digital, and that's growing at quite a rate. What has picked up and what you're recognizing is the velocity of transformation, and it has picked up. With regards to India, I think just a little context. India started to liberalize back in 1991.
We saw, in terms of the private sector infrastructure, all of the different kinds of systems that make up an economy and the institutions, we saw very little for about 10 years. Then all of a sudden, this rocket ride. India is a fabulous example of a democracy based on rule of law with an unbelievable thirst for economic growth, prosperity, and better standards of living for more and more of its people on that one. From my standpoint, it was a pleasure to be a part of all of that. We visit India numerous times during the year. We have a little over 6,000 employees now in India, and that will continue to grow.
From our own planning and our own thinking, the example that we just talked about in terms of the mobile learning platform and others, we will continue to push very aggressively in markets like India and in other markets that do have the same kind of environment and appetite and have an environment that's conducive to making sure that the investment that one makes in that market is protected and is able to grow. Where those exist, and there are more and more and more markets that are doing that and represented that way. We've got to be very quick to be able to make a difference in that. India is probably the best example of that. Thank you very much.
Also, Alrich, shareholder for many years. I want to thank you for supporting WQXR. I always hear your voice there. I'm a Young Artists Showcase.
Thank you.
I didn't know whether I was going to have to play something or something. That's a great program. It was wonderful to see the young talent that come and how talented they are and how young they are at being able to do all they do. It's quite remarkable. It means it's doable. What's unacceptable is when we talk about some of the facts in our school systems today and elsewhere where people don't have that opportunity and they don't have that chance and they don't have the capability to be able to make a difference like that. Therefore, what it means is our resolve has to get bigger and that we all have to do more in terms of being committed to helping young people become part of our workforce of tomorrow. Anything else for that one? Okay.
If there are no other questions, we will now proceed to the next order of business. I understand the inspectors of election have now submitted their reports to the secretary. Mr. Vittor will read that report.
The preliminary tally of votes by the inspectors of election shows that the 12 persons nominated as directors of The McGraw Hill Companies, Inc. have been elected. The proposal to amend the restated certificate of incorporation to permit shareholders to call special meetings has been approved. The proposal to approve on an advisory basis the executive compensation program for the company's named executive officers has been approved. The greatest number of votes in connection with the proposal to vote on an advisory basis on how often the company will conduct an advisory vote on executive compensation was for an annual vote. Ernst & Young LLP has been approved in connection with the ratification of their appointment as the company's independent registered public accounting firm for 2011. The shareholder proposal regarding written consent has not been approved.
The certificate of the inspectors of election will be filed with the records of the meeting, and the final results will be available on or before May 2 in our SEC Form 8-K filing.
Terrific. Thank you, Ken. Okay. That concludes our annual meeting. Let me say once again, thank you all for taking the time to be here and for your connection to McGraw Hil l Company . For those that are listening, thank you as well for your support. Please don't forget the Digital Expo and take a look at that. There will be no further business, and I will now entertain a motion to adjourn.