The McGraw-Hill Companies Reports 43.2% Increase in Fourth Quarter EPS

Fourth Quarter 2009 Highlights:
 
- Diluted earnings per share of $0.53
- Net income increases by 44.3% to $167.3 million
- Operating margin expands in all segments

2010 Guidance: $2.55 to $2.65 per diluted share vs. $2.33 in 2009

NEW YORK, Jan. 26 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies (NYSE: MHP) today announced diluted earnings per share of $0.53 for the fourth quarter of 2009, a 43.2% increase compared to $0.37 for the same period in 2008. It was the first quarterly increase in diluted earnings per share for The McGraw-Hill Companies since the third quarter of 2007.

Fourth quarter earnings per share in 2009 included a pre-tax gain of $10.5 million ($6.7 million after tax), or $0.02 per diluted share from the divestiture of BusinessWeek in December. In the fourth quarter of 2008, diluted earnings per share included a pre-tax restructuring charge of $26.3 million ($16.4 million after tax), or $0.05 per diluted share.

Net income for the fourth quarter of 2009 increased by 44.3% to $167.3 million. Fourth quarter revenue grew by 3.3% to $1.5 billion, the first quarterly increase in revenue since the third quarter of 2007.

"Continued recovery in the corporate new issue market here and overseas at Standard & Poor's Credit Market Services and an upswing in higher education, professional and international markets enabled us to finish 2009 positively and set the stage for more growth in 2010," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "Increased revenue and tight cost controls contributed to substantial improvement in our operating margin in the fourth quarter compared to the same period last year."

For 2009, The McGraw-Hill Companies reported diluted earnings per share of $2.33, which reflected a loss of $0.03 per diluted share on the divestiture of Vista Research, net restructuring charges of $0.03 per diluted share and a gain on the divestiture of BusinessWeek of $0.02 per diluted share. In 2008, diluted earnings per share of $2.51 included restructuring charges of $0.14 per diluted share.

Net income in 2009 declined by 8.6% to $730.5 million. Revenue for the year decreased by 6.3% to $5.95 billion.

Education: Revenue for this segment in the fourth quarter of 2009 increased by 2.6% to $520.0 million. Operating profit for the period was $33.5 million compared to a loss of $12.7 million in the fourth quarter of 2008, which included $11.4 million in restructuring charges. Foreign exchange rates increased revenue by $8.2 million but reduced operating profit by $2.0 million.

For full year 2009, revenue declined 9.5% to $2.4 billion at McGraw-Hill Education. Including restructuring charges of $11.6 million, operating profit was off 14.1% to $276.0 million compared to 2008. In 2008, operating profit of $321.4 million reflected restructuring charges of $25.3 million. Foreign exchange rates reduced revenue by $26.6 million in 2009 and had an immaterial impact on operating profit.

The McGraw-Hill School Education Group's revenue declined 7.6% to $149.8 million in the fourth quarter and fell by 18.4% to $1.1 billion for full year 2009 compared to 2008.

The McGraw-Hill Higher Education, Professional and International Group's revenue increased 7.5% to $370.2 million in the fourth quarter and was off by 0.1% to $1.3 billion for full year 2009 versus 2008.
 

The following information was filed by Sp Global Inc. (SPGI) on Tuesday, January 26, 2010 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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