NEW YORK, May 20 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies
(NYSE: MHP) today announced that it is restructuring a limited number of
business operations in its Financial Services and Education segments to more
efficiently serve its markets and strengthen its long-term growth prospects.
"We are taking actions to further streamline our operations and lower our
costs in the areas most affected by current market challenges," said Harold
McGraw III, chairman, president and chief executive officer of The McGraw-Hill
Companies. "The decision to reduce staff is always difficult, but we believe
these actions will help improve efficiency while enabling us to focus our
resources on those parts of our business that are experiencing the strongest
growth."
In connection with these actions, the Corporation will incur a
restructuring charge in the second quarter of 2008 of $23.7 million, pre-tax,
consisting mostly of employee severance costs related to a workforce reduction
of 395 positions in its Financial Services and McGraw-Hill Education segments.
This reduction represents approximately 2 percent of the Corporation's global
workforce. The total restructuring charge after tax is $14.8 million, or
$0.05 per diluted share of second quarter 2008 earnings.
"With the seasonality of our business concentrating earnings in the second
half of the year and despite continued uncertainty about the pace of recovery
in the capital markets, we are not changing our previous 2008 earnings per
share guidance of $2.65 to $2.75, which excludes the restructuring charge and
associated benefits," said Mr. McGraw.
The impact of restructuring within the Financial Services segment was
$15.2 million, pre-tax, and was driven by the current credit market
environment as well as the consolidation of several support functions.
McGraw-Hill Education accounts for $8.5 million, pre-tax, of the
restructuring charge. The majority of restructuring actions in this segment
are in the assessment business, where the Corporation is taking steps to
consolidate its resources, better leverage its partnerships with key strategic
suppliers, and facilitate a strategic shift toward increased investments in
its digital and custom offerings. Across other parts of the segment, the
company also is taking steps to enable greater efficiencies, better address
new and existing revenue streams, and shift investments toward digital
products.
About The McGraw-Hill Companies:
Founded in 1888, The McGraw-Hill Companies is a leading global information
services provider meeting worldwide needs in the financial services, education
and business information markets through leading brands such as Standard &
Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The
Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8
billion. Additional information is available at http://www.mcgraw-hill.com.
Homepage: http://www.mcgraw-hill.com
News: http://www.mcgraw-hill.com/news/overview.shtml
Investor Relations: http://www.mcgraw-hill.com/investor_relations
Corporate Responsibility: http://www.mcgraw-hill.com/cr/overview.shtml
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Release issued: May 20, 2008
SOURCE The McGraw-Hill Companies
