New York, December 09, 2014 -- Moody's Investors Service ("Moody's") says on December 8, 2014, McGraw-Hill School Education Holdings, LLC ("MHSE") announced plans to fund a $100 million dividend using a portion of $280 million of cash balances estimated for month end. The planned dividend and related amendment for consent do not have an immediate impact on ratings given good performance in the School segment more than offsets weak performance in the smaller CTB division resulting in overall cash EBITDA pacing ahead of Moody's expectations. In addition, cash balances post-dividend will total more than $150 million with an additional $150 million of ABL revolver capacity being sufficient to cover seasonal cash needs of roughly $175 million in the first half of the calendar year. Management indicates seasonal cash needs have been reduced reflecting a focus on cost savings as well as the shift in operations to asset-light digital products. Looking forward, seasonal cash needs could vary in years during which larger state adoptions are planned requiring greater advance investment or could vary based on the performance of the CTB division.

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