• This Day (Nigeria) aagm: Political Economy of Sustainable Democracy in Nigeria (2)

Investment Bank for the funding of the project Bulgaria - Transit Roads IV - First Phase. The amendment to the contract is related to the relocation of some 8 million euro from this project to the project Lot 1 for the rehabilitation and improvement of Daskalovo-Doupnitsa Road E-79.
- A decision to add 645 jobs on the payroll for improving the capacity of local administration. The funds necessary for the increase stands at 4.5 million leva, provided in the target costs section of the central government budget for 2005.
- A decision to appoint Dimiter Dimitrov Chairman of the State Contingency Reserves and Wartime Stockage State Agency. Major General Dimiter Dimitrov has served 30 years in the army after he graduated from the military academy ion Turnovo.
- A decision to declare June 11 the professional day of economists. The decision is related to the 110th anniversary from the establishment of the first economic association.
- A decision to propose for parliamentary ratification the Memorandum of Understanding with the European Community regarding Bulgaria participation in the Culture 2000 community programme in 2005 and 2006.
- A decision to appoint Matei Marev chairman of the Court of Arbitration with the Public Procurement Agency. The appointment is for a period of five years. IT/BR/LN/
LN1733ES.122
Document BTA0000020050428e14s001jl
The McGraw Hill Companies' Annual Meeting of Shareholders - Final
11,114 words

27 April 2005

FD (FAIR DISCLOSURE) WIRE

FNDW

English

© Voxant Inc. All rights reserved.
OPERATOR: (Operator Instructions) I will now turn the meeting over to Harold McGraw, III, Chairman, President and Chief Executive Officer for the McGraw Hill Companies. Thank you again for participating. We will now proceed.
HARRY MCGRAW, CHAIRMAN, PRESIDENT, CEO, MCGRAW HILL INC.: Okay, good morning. I'm Harry McGraw, Chairman, President and Chief Executive Officer of McGraw Hill Companies, and it's my pleasure to welcome you to our 2005 annual meeting of shareholders. It's now 11:00, and I call the meeting to order.
As the annual meeting is being available by teleconference and audio webcast, I would also like to welcome all of those that are listening in. We know we have people from all around the world. Your patience in your different time zones, we appreciate very much your interest and your support.
I would like to introduce you to the gentlemen at the table with me. Bob Bahash, our Executive Vice President and Chief Financial Officer. And then Ken Vittor, our Executive Vice President and General Counsel of the corporation.
It's my pleasure now to introduce our Board of Directors. We have a world-class board, which is a tremendous source of pride to this corporation. At a time when we have seen so much concern about issues of corporate governance, I think our shareholders can take great comfort in the fact that the dedication and leadership demonstrated by this board over many years-very much (audio break).
Before I introduce them, I want to give you a little announcement. The Board of Directors met at a special meeting this morning before the meeting. And because of some of the issues before us are long-term prospects for continued growth, the long-term total shareholder return, and near-term, and actions on the stock price, the Board held a special session this morning and voted a 2 for 1 (audio break) common shares.
Thank you. That's a nice way to begin a meeting.
Now, very quickly, the stock split is subject to shareholder approval of an increase in the Corporation's number of authorized common shares. The stock split will be distributed on May 17 to shareholders of record on May 6.
The Board believes that the split would make our shares more attractive to a wider audience of investors. And, incidentally, this is the third stock split that the Corporation has had since 1996 on that one and reflects, I think, the long-term appreciation of our price and of the (audio break) very pleased with that.
Now it makes it even easier to introduce our directors, and I'd ask them to stand while I say their names, and if they remain standing. Please hold your applause until all the directors are announced.
Our first director is Pedro Aspe. He's the Chairman and Chief Executive Officer of Protego. Sir Win Bischoff, Chairman, Citigroup Europe. Hilda Ochoa-Brillembourg, Chairman and Chief Executive Officer of Strategic Investment 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, Averdale International LLC.
James H. Ross, retired Deputy Chairman, National Grid Transco PLC. Edward B. Rust, Jr., Chairman and Chief Executive Officer, State Farm Insurance Company. Kurt L. Schmoke, Dean, Howard University School of Law and former mayor of Baltimore.
And Sidney Taurel, Chairman, President and Chief Executive Officer of Eli Lilly and Company. And of course, I'd like to recognize the Chairman Emeritus, Harold W. McGraw.
Thank you very much. Thank you very much for that. Now I'd like to introduce members of the senior management team and I'd ask them to stand as I read their names. And please remain standing.
Kathleen Corbet, President, McGraw Hill Financial Services, President, Standard &Poors. Henry Hirschberg, President McGraw-Hill Education. Scott Marden, President, McGraw-Hill Information and Media Services.
David Murphy, Executive Vice President, Human Resources. Deven Sharma, Executive Vice President, Global Strategy. Bruce Marcus, Executive Vice President, Chief Information Officer. And Glenn Goldberg, Senior Vice President, Corporate Affairs and Assistant to the Chairman. Thank you all very much.
And so that Bob and Kim don't feel badly, we already introduced them. Welcome again. It's always nice at this time to also thank people that have come from quite a distance to be with you and it's nice of you to have done that.
I want to thank a couple of people. It is always nice when you have the former Chairman and Chief Executive Officer back. Joe and Joan Dion (ph).
We have two former directors that are back with us, Lois Dickson Rice and Vern Alden (ph). Would you both stand? Thank you.
And our former executive vice president of just about everything, Tom Sullivan and Salsey (ph). Tom? Thank you all for that. All right.
We'll now proceed to the business of our annual meeting, the purpose of which is to review the 2004 operations, take a look at our prospects for 2005 and beyond, to elect four directors, to approve the key executive short-term incentive compensation plan, to amend the Company's restated certificate of incorporation to increase the authorized shares of common stock, to ratify the appointment of Ernst and Young as our independent registered public accounting firm for 2005, and to vote on a shareholder proposal concerning poison pills, shareholder rights plans and to take up any other matters that may properly (audio break) for this 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 a quorum is present, we will proceed with the matters listed in item two of the agenda that's been distributed. Sir?
KEN VITTOR, GENERAL COUNSEL, MCGRAW HILL INC.: 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, 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 10Ks, 10Qs, other periodic reports filed with the United States Securities and Exchange Commission.
The Corporation's secretary, Mr. Scott Bennett, has advised me that we have a certified list of shareholders of record as of the close of business on March 8, 2005, who are entitled to vote at this annual shareholders meeting. Such lists have been opened for inspection by shareholders.
You also have copies of the notice of meeting, proxy materials, annual report and affidavits of mailing relating to this annual meeting. Affidavits will be filed with the records of the annual meeting.
The Board of Directors has designated two representatives of the Bank of New York to act as inspectors of election for the annual meeting. Representatives of the Bank of New York 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 84% of the outstanding shares of the McGraw-Hill Companies, representing more than a majority of the votes entitled to be cast at this annual meeting, are represented either in person or by proxy.
Chairman, the annual meeting has been duly convened. A quorum is present. The business of the annual meeting should (audio break)
HARRY MCGRAW: Thank you very much, and we will now proceed with the election of directors and other formal business items. Ballots will be distributed to those who want to vote in person or on any proposals.
We will vote on each proposal before taking up the next proposal. Time will be provided for specific questions relating to each of our proposals as they are introduced. Further time will be provided following the annual report on operations for questions other matters.
I would impress that all questions and remarks concerning the formal business items be directed to the chair. In order that remarks from the floor may be heard clearly by everyone, we have placed microphones on each side of the auditorium.
I would suggest that each shareholder who wishes to ask a question or make a statement use one of the microphones. If that is not convenient, I will repeat the question. Please state your name and whether you are a shareholder yourself or you are representing a shareholder.
The first item to be voted upon is the election of four directors. We present as nominees for election as directors the four persons named in the proxy statement mailed to you on March 21, 2005. The names of the four directors nominated for election are Sir Win Bischoff, Douglas Daft, Linda Koch Lorimer and Harold McGraw, III. The floor is now open for questions or comments regarding the election of these four directors.
Those desiring ballots, please raise your hands. I would remind you that if you sent in a proxy, voted by telephone or over the internet, it's not necessary to (audio breakproceed.
After all the items have been voted upon, we will collect the ballots for tabulation by the inspectors of election. Any questions on item? Since there is no further discussion on this proposal, I declare the voting closed on this item.
The second item to be voted upon is the approval of the key executive short-term incentive compensation plan. The specific proposal is as follows - Resolve that the Company's key executive short-term executive incentive compensation plan as amended and restated, the form of Appendix A to the proxy statement, including, without limitations, the net income formula under the plan for determining maximum bonus payable to a covered (audio break) and the method by which the committee designates covered employees for each year is hereby authorized, approved and adopted. The floor is open for questions or comments. Item two.
As there is no further discussion on this proposal, I declare the voting closed on this item. Third item to be voted upon is the proposal to increase the authorized common stock to 600,000-600 million, rather, shares, from 300 million.
The purpose for the increase is to provide a source for future financing, stock dividends, stock splits and general corporate purposes. The specific proposal is as follows - that the proposal to amend Article 3 of the restated certificate of incorporation of the Company in the form of Appendix B to the proxy statement so as to increase the aggregate number of shares of common stock, our value $1 per share, which the Company is authorized to issue to 600 million shares from 300 million shares is hereby approved, authorized and adopted. Any questions, comments? Since there is no further discussion on this proposal, I declare the voting closed on this item.
The fourth item to be voted upon is the ratification of the selection of Ernst and Young as the Company's independent registered public accounting firm for 2005. Ms. Linda Lamb (ph), partner of Ernst and Young responsible for the McGraw-Hill Companies' account, present today at our meeting. They are available now if you wish to ask any questions about the selection of their firm as our independent registered public accounting firm, or if you wish to ask them any questions about the financial statements of McGraw-Hill Company.
The specific proposal as follows - that the selection by the Board of Directors of Ernst and Young as an independent registered public accounting firm for the Corporation and its subsidiaries for 2005 be hereby ratified and approved (audio break)
--open to questions. Since there is no further discussion on this proposal, I declare the voting closed on this item.
The fifth item to be voted upon is a shareholder proposal that requests that shareholders vote on poison pills. I understand that Mr. Ken Steiner (ph) is prepared to present the following proposal - Resolved the shareholders of our company request our Board of Directors to redeem any active poison pill unless such poison pill is approved by the affirmative vote of holders of a majority of shares present and voting as a separate ballot item, be held as soon as may be practical.
I'd like to ask Mr. Steiner audio break) an opportunity to make a statement in support of his proposal if (audio break)
KEN STEINER, SHAREHOLDER: Thank you. And you read the proposal, so everybody knows what it is. It's on page 38 of the proxy statement, and I want to make a brief statement in support of it and also review a few things in Management's response, which I think should be answered.
First of all, last year this proposal received 68%. As you and the directors know, that's a massive vote on a shareholder proposal. It's very rare to get over 50%. 68% is a very high vote and it's the second time the proposal received a majority at this company. And I think that Management and the directors should take into consideration that I believe this is going to pass today, and if it does, it will be the third time and I hope you'll take some action upon it.
Now, the reason that we want to redeem the poison pill is because it doesn't protect shareholders, in our view. It simply entrenches Management. As Arthur Levitt states, and we have a quote from him on page 38, and I believe that he was probably the best SEC chairman we've had in this country, he says, "Poison pills entrench current Management and water down shareholder votes and deprive them of a meaningful voice in corporate affairs."
We also have a staggered board at this company, which makes shareholder inspired changes even more difficult. It's almost impossible for somebody to come in and make a hostile takeover. Now, I agree with Management in its response that a hostile takeover may not always be the best thing for the Company. But I believe that shareholders ought to have the preeminent opportunity to decide upon that, and by putting in place all of these entrenchment devices, it makes it almost impossible.
It would take years for somebody to take control of the board, and then even if they were to receive some seats after the first year, you could put in place a poison pill. And this makes it very harmful to the Company, in my opinion.
Now, with regard to Management's response, which is on page 40, first of all, you call it a shareholder rights plan. This is really an oxymoron. It takes rights away from shareholders, that's a fact, and gives them to the directors. I know that that's the euphemism that the management likes to use, the shareholder rights plan, but I think you ought to come up with a better title for your proxy statement next year, a more honest one.
Also, you mention that it protects shareholders from unfair and coercive takeover tactics, such as a partial or two-tier tender offer. You can protect the shareholders from that with a bylaw. You don't need a poison pill to do that. That's legally correct, in my view.
Basically, the poison pill dilutes and reduces the power that shareholders have. It reduces their influence and I believe it's very paternalistic for management to say in their statement that they're doing this to protect us, even though 68% of shareholders - and I believe a majority this year - are going to say we can protect ourselves.
So I'm sure that your motives are good, because I've been a stockholder myself for over 10 years and I appreciate the good job that you've done with the Company. But I hope that you'll pay a little more attention to some of the corporate governance matters that I mentioned today. Thank you.
HARRY MCGRAW: Thank you very much, Mr. Steiner. Now, this advisory resolution is framed as a request. The Board of Directors has recommended a vote against this.
The Board believes that the shareholder rights plan - and we (audio break) is a shareholder rights plan - a very important tool that enables the Board to maximize shareholder value, (audio break) the event of a proposed acquisition (audio break) of a shareholder rights plan which is not intended to prevent a takeover of the corporation. Also allows the board to protect the corporation and its shareholders from unfair and coercive takeover practices, tender plans have been adopted by almost 60% of the (audio break).
I do want to point out that the Board of Directors recognizes that certain shareholders and institutional holders will be voting to withhold authority. And their outside advisors (inaudible) recommending that they do (audio break). In connection with the election of our director (audio break) as a result of the passage of similar advisory (audio break) at the 2004 annual meeting. As we set forth in the proxy statement, the board met to reconsider the rights plan after last year's annual meeting, after consultation with outside counsel, and after careful consideration of the results of the vote of the (audio break) advantages and disadvantages of the rights plan and the state of the current corporate governance debate (audio break) to retain.
We recognize that certain of our shareholders take a different view from us on this matter, and we (audio break). The floor is open for any questions or comments on item number (inaudible) Since there is no further discussion on this proposal, I declare the voting closed on this item.
This will conclude the voting of the formal business items and the ballots will now be collected. Votes will be counted on the matters. Okay.
As the votes are being tallied, and again I'd like to welcome you to the 2005 annual shareholders meeting. This morning I want to talk with you a little bit about a number of (audio break).
I want to talk to you about our performance for 2004. I want to talk to you about our start for 2005. I want to introduce you to some people that are making it happen. I want to discuss some of the worldwide conditions that are influencing our market that will drive our growth in 2005, but for a long (audio break).
Let me begin, and I'm pleased to say that 2004 was another very strong year for the McGraw-Hill Companies. It was a year that again demonstrated that the strength of our portfolio, our position in the markets that we serve and our ability to perform for our shareholders.
Our results also provide tangible evidence that our strategy, I believe, is on a solid path. Markets have deep needs that the 18,000 men and women of the McGraw-Hill companies remain committed to meeting the needs of our customers and markets with dedication and integrity.
McGraw-Hill Companies has aligned itself with powerful and enduring global trends that drive economic growth and individual empowerment worldwide. The need for knowledge, the need for capital, the need for information transparency.
As you read in our annual report and can see vividly in the exhibition hall - and I do hope that everybody gets an opportunity to walk and see some of the exhibits and to meet some of the young men and women that are making it all happen (audio break) exhibit.
And we are opening doors in virtually every (audio break) in every region of the (audio break) It's a mission of which we are tremendously proud, and one that has delivered superior returns to our shareholders over an extended period of (audio break)
In 2004, the Corporation's market capitalization grew by $4.1 billion and total shareholder return grew almost (inaudible) and that compares to about 11% gain of the S&P 500.
In fact, we are pleased to have outperformed the S&P 500 and our proxy peer group the last ten-year period, seven, five, three and again in (inaudible). We're very proud of that record and we take it very seriously.
Revenue last year increased 7.4% to a record $5.3 billion, our biggest annual increase since 1997, while net income increased 9.9% to $756 million. Operating margins rose 3 percentage points to 25%. And on a nonGAAP basis, earnings per share from continuing operations increased 16.5%.
A key component of our strong performance for the year was double-digit top and bottom line growth at McGraw-Hill Financial Services. In fact, it was another record year for Standard & Poor's.
S&P's performance reflects its continued global growth, the diversity of its products and services, its decreased dependence on new issuance in the U.S. bond market. Its reduced sensititivy to the interest rate cycle, and most importantly, the thought leadership that it brings to capital markets. Simply put, Standard & Poor's plays an essential role in the global capital market.
McGraw-Hill Education also had another year of growth. Its performance is a demonstration of the depth and the breadth of its portfolio and how it is partnering with states, schools, school districts, teachers, students, parents and increasingly countries, to meet the full spectrum of their educational needs.
Our higher education professional and international group was a key growth driver of McGraw Hill Education, with our higher education division outperforming the market and growing its share.
McGraw-Hill Education is increasingly an essential part of the global educational infrastructure. As understanding that the economic growth, a function of the size and the skill sets of your workforce and therefore, the quality of your educational system. The linking of achievement of economic growth to your educational system is a powerful statement, and a necessary one.
In 2004, we continued to make progress in our Information Media Services segment, where we are strengthening our business information platforms by extending our reach into new markets and audiences, and providing new and innovative tools and content.
Our business information platforms continue to grow in importance in vital sectors of the global economy, such as energy, instruction, aviation and healthcare. And across all our businesses, we made great progress last year in extending our global position.
Among many examples of how we increased our global footprint, we established a representative business or office router for all of our businesses in China, in Beijing. We've increased our