The McGraw-Hill Companies Announces Restructuring of Select Business Operations
New York, New York, USA, 08 January 2008 -- /PRNewswire/ -- The McGraw-Hill Companies (NYSE: MHP) today announced that it restructured a limited number of business operations in the fourth quarter of 2007 to fortify the corporation's long-term growth prospects.
"The McGraw-Hill Companies remains well-positioned to capitalize on the long-term trends driving global economic growth, and we have taken steps to streamline our operations, lower our costs, and strengthen our ability to capitalize on key market opportunities," said Harold McGraw III, chairman, president, and chief executive officer of The McGraw-Hill Companies. "Today's growing, knowledge-based global economy has three critical needs -- the need for knowledge, the need for capital, and the need for information transparency -- and these actions will enhance our ability to more efficiently serve our markets."
In the fourth quarter of 2007, the corporation incurred a restructuring charge of USD 43.7 million, pre-tax, consisting mostly of employee severance costs related to a workforce reduction of approximately 600 positions across the corporation. This reduction represents approximately 3% of the corporation's global workforce. The total restructuring charge after tax is USD 27.3 million, or USD 0.08 per diluted share of fourth quarter 2007 earnings.
"Reducing staff is never an easy decision, but we believe the steps we have taken will strengthen our organization, enhance our ability to serve our customers, and maximize shareholder value," said McGraw.
McGraw-Hill Education accounts for USD 16.3 million, pre-tax, of the restructuring charge. The Higher Education, Professional, and International Group has taken steps to consolidate certain sales, editorial, marketing, and administrative functions, primarily in our international locations, to better address new and existing revenue streams for textbooks, facilitate its strategic shift toward increased investments in digital and custom products, and enable greater efficiencies. The School Education Group also is making a strategic shift toward more digital products, while taking steps to centralize certain management functions and to better leverage outsourcing opportunities.
The Financial Services segment accounts for USD 18.8 million, pre-tax, of the restructuring charge. In this segment, the reduction was driven by the current business environment and the consolidation of several support functions across Standard & Poor's global operations. The segment's restructuring actions affected both Standard & Poor's ratings and non-ratings businesses.
The Information & Media segment accounts for USD 6.7 million, pre-tax, of the restructuring charge. Restructuring activities in the segment's Business-to-Business Group -- which includes BusinessWeek, J.D. Power and Associates, Platts, McGraw-Hill Construction, and AVIATION WEEK -- are related primarily to the reallocation of certain resources to support continued digital-evolution and productivity initiatives.
Restructuring of corporate activities contributed USD 1.9 million, pre-tax, to the total charge and includes the consolidation of certain information technology functions and processes.
"The corporation's diverse portfolio of industry-leading products and services has positioned us well for consistent long-term growth, and these actions will strengthen our pursuit of that goal," said McGraw.
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 2006 were USD 6.3 billion. Additional information is available at http://www.mcgraw-hill.com.
Source: The McGraw-Hill Companies