S&P Global (SPGI) 10-Q 28 Oct 09 2009 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
Share data in Millions	9 Months Ended Sep. 30, 2009	Oct. 16, 2009	Jun. 30, 2008
Document and Company Information [Abstract]
Entity Registrant Name	MCGRAW-HILL COMPANIES INC
Entity Central Index Key	0000064040
Document Type	10-Q
Document Period End Date	2009-09-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$12,743,463,262
Entity Common Stock, Shares Outstanding		314.9

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenue
Product	$1,013,213	$1,136,462	$1,828,424	$2,088,217
Service	862,690	912,079	2,660,866	2,851,420
Total revenue	1,875,903	2,048,541	4,489,290	4,939,637
Operating-related
Product	438,405	453,798	880,913	914,064
Service	297,475	301,290	926,411	996,489
Operating-related expenses	735,880	755,088	1,807,324	1,910,553
Selling and general
Product	252,178	302,858	671,977	776,604
Service	294,783	294,090	912,421	954,952
Selling and general expenses	546,961	596,948	1,584,398	1,731,556
Depreciation	26,031	29,952	84,225	87,890
Amortization of intangibles	11,066	13,637	36,710	40,981
Total expenses	1,319,938	1,395,625	3,512,657	3,770,980
Income from operations	555,965	652,916	976,633	1,168,657
Other loss	0	0	13,849	0
Interest expense - net	17,827	22,002	56,917	60,186
Income before taxes on income	538,138	630,914	905,867	1,108,471
Provision for taxes on income	195,882	234,099	329,735	410,143
Net income	342,256	396,815	576,132	698,328
Less: net income attributable to noncontrolling interests	(6,145)	(6,649)	(12,924)	(14,758)
Net income attributable to The McGraw-Hill Companies, Inc.	$336,111	$390,166	$563,208	$683,570
Earnings per common share:
Basic	1.08	1.25	1.8	2.16
Diluted	1.07	1.23	1.8	2.13
Average number of common shares outstanding:
Basic	312,471	313,105	312,067	316,969
Diluted	313,642	317,203	312,900	320,600
Dividend declared per common share	0.225	0.22	0.675	0.66

Consolidated Balance Sheet (Una

Consolidated Balance Sheet (Unaudited) (USD $)
In Thousands	Sep. 30, 2009	Dec. 31, 2008	Sep. 30, 2008
Current assets:
Cash and equivalents	$957,265	$471,671	$485,226
Accounts receivable (net of allowance for doubtful accounts and sales returns)	1,174,567	1,060,858	1,309,550
Inventories	338,997	369,679	423,779
Deferred income taxes	286,075	285,364	285,536
Prepaid and other current assets	100,035	115,151	108,094
Total current assets	2,856,939	2,302,723	2,612,185
Prepublication costs (net of accumulated amortization)	459,629	552,534	551,548
Investments and other assets:
Assets for pension benefits	59,396	52,994	260,989
Deferred income taxes	47,513	79,559	13,605
Other	170,278	176,900	180,768
Total investments and other assets	277,187	309,453	455,362
Property and equipment - at cost	1,580,614	1,573,951	1,630,095
Less: accumulated depreciation	(1,005,493)	(952,889)	(999,848)
Net property and equipment	575,121	621,062	630,247
Goodwill and other intangible assets:
Goodwill - net	1,691,837	1,703,240	1,718,610
Copyrights - net	150,303	162,307	166,594
Other intangible assets - net	404,451	428,823	439,567
Net goodwill and intangible assets	2,246,591	2,294,370	2,324,771
Total assets	6,415,467	6,080,142	6,574,113
Current liabilities:
Notes payable	22	70,022	307,122
Accounts payable	314,571	337,459	318,974
Accrued royalties	98,390	111,471	101,315
Accrued compensation and contributions to retirement plans	386,090	420,515	394,657
Income taxes currently payable	158,472	17,209	180,810
Unearned revenue	1,080,452	1,099,167	1,069,382
Deferred gain on sale leaseback	11,106	10,726	10,602
Other current liabilities	466,967	464,134	462,439
Total current liabilities	2,516,070	2,530,703	2,845,301
Other liabilities:
Long-term debt	1,197,747	1,197,611	1,197,565
Deferred income taxes	3,357	3,406	142,704
Liability for pension and other postretirement benefits	583,197	606,331	278,748
Deferred gain on sale leaseback	150,707	159,115	161,854
Other non-current liabilities	211,149	230,105	238,954
Total other liabilities	2,146,157	2,196,568	2,019,825
Total liabilities	4,662,227	4,727,271	4,865,126
Shareholders' equity:
Common stock	411,709	411,709	411,709
Additional paid-in capital	4,106	55,150	59,087
Retained income	6,421,323	6,070,793	6,024,171
Accumulated other comprehensive loss	(389,681)	(444,022)	(51,806)
Less: common stock in treasury - at cost	(4,770,451)	(4,811,294)	(4,809,801)
Total shareholders' equity - controlling interests	1,677,006	1,282,336	1,633,360
Total shareholders' equity - noncontrolling interests	76,234	70,535	75,627
Total shareholders' equity	1,753,240	1,352,871	1,708,987
Total liabilities and shareholders' equity	$6,415,467	$6,080,142	$6,574,113

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (Unaudited) (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities
Net income	$576,132	$698,328
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	84,225	87,890
Amortization of intangibles	36,710	40,981
Amortization of prepublication costs	225,602	218,788
Provision for losses on accounts receivable	22,386	13,856
Net change in deferred income taxes	(2,178)	(4,791)
Stock-based compensation	12,483	3,564
Other loss	13,849	0
Other	(2,965)	(6,946)
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable	(126,289)	(138,744)
Inventories	31,717	(74,125)
Prepaid and other current assets	(6,239)	13,146
Accounts payable and accrued expenses	(71,117)	(291,444)
Unearned revenue	(32,915)	(13,697)
Other current liabilities	6,609	497
Net change in prepaid/accrued income taxes	161,624	170,148
Net change in other assets and liabilities	(33,240)	(3,504)
Cash provided by operating activities	896,394	713,947
Cash flows from investing activities
Investments in prepublication costs	(129,779)	(197,264)
Purchase of property and equipment	(32,603)	(66,437)
Acquisition of businesses	0	(39,461)
Disposition of business and property and equipment	9,819	281
Additions to technology projects	(14,801)	(18,581)
Cash used for investing activities	(167,364)	(321,462)
Cash flows from financing activities
Payments/additions on short-term debt, net	(70,000)	307,100
Dividends paid to shareholders	(212,678)	(211,156)
Repurchase of treasury shares	0	(434,108)
Exercise of stock options	12,782	41,199
Excess tax benefits from share-based payments	74	4,108
Cash used for financing activities	(269,822)	(292,857)
Effect of exchange rate changes on cash	26,386	(10,498)
Net change in cash and equivalents	485,594	89,130
Cash and equivalents at beginning of period	471,671	396,096
Cash and equivalents at end of period	$957,265	$485,226

Basis of Presentation

Basis of Presentation
	9 Months Ended Sep. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	1. Basis of Presentation The financial information in this report has not been audited, but in the opinion of management all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly such information have been included. The operating results for the three and nine months ended September30, 2009 and 2008 are not necessarily indicative of results to be expected for the full year due to the seasonal nature of some of our businesses. The financial statements included herein should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December31, 2008 (the Annual Report). Our critical accounting policies are disclosed in Item7, Managements Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report for the year ended December31, 2008. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts and sales returns, prepublication costs, valuation of inventories, valuation of long-lived assets, goodwill and other intangible assets, pension plans, income taxes, incentive compensation and stock-based compensation. Since the date of the Annual Report, there have been no material changes to our critical accounting policies. In the third quarter of 2009, we adopted the Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 105, Generally Accepted Accounting Principles (FASB ASC 105). FASB ASC 105 establishes the FASB ASC as the source of authoritative accounting principles recognized by the FASB to be applied to nongovernmental entities in preparation of financial statements in conformity with Generally Accepted Accounting Principles. The adoption did not have an impact on our consolidated financial statements. In the second quarter of 2009, we adopted FASB ASC 855, Subsequent Events (FASB ASC 855). FASB ASC 855 sets forth general standards of accounting for and the disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. We have evaluated subsequent events through October27, 2009, which represents the date the financial statements are issued. The adoption did not have an impact on our consolidated financial statements. Effective January1, 2009, we adopted FASB ASC 810-10-65-1 Consolidation, (FASB ASC 810-10-65-1) which establishes accounting and reporting standards for any noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FASB ASC 810-10-65-1 clarifies that a noncontrolling interest in a subsidiary should be reported as a component of equity in the consolidated financial statements and requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interests. Accordingly, $76,234, $70,535 and $75,627 as of September30, 2009, December31, 2008 and September30, 2008, respectively, have been reclassified from other non-current liabilities

Comprehensive Income

Comprehensive Income
	9 Months Ended Sep. 30, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income	2. Comprehensive Income The following table is a reconciliation of net income to comprehensive income for the periods ended September30: Three Months Nine Months 2009 2008 2009 2008 Net income $ 342,256 $ 396,815 $ 576,132 $ 698,328 Other comprehensive income: Foreign currency translation adjustment 22,146 (31,559 ) 41,712 (33,860 ) Pension and other postretirement benefit plans, net of tax 637 249 13,376 (7,581 ) Unrealized gain/(loss) on investment, net of tax (324 ) (445 ) 1,419 (3,987 ) Comprehensive income 364,715 365,060 632,639 652,900 Less: comprehensive income attributable to noncontrolling interests (7,996 ) (3,111 ) (15,090 ) (8,513 ) Comprehensive income attributable to The McGraw-Hill Companies, Inc. $ 356,719 $ 361,949 $ 617,549 $ 644,387

Segment and Related Information

Segment and Related Information
	9 Months Ended Sep. 30, 2009 USD / shares
Segment and Related Information [Abstract]
Segment and Related Information	3. Segment and Related Information We have three reportable segments: McGraw-Hill Education, Financial Services and Information Media. McGraw-Hill Education The McGraw-Hill Education segment is one of the premier global educational publishers serving the elementary and high school (el-hi), college and university, professional, international and adult education markets. During the nine months ended September30, 2009, the segment incurred a net pre-tax restructuring charge that reduced operating profit by $11.6million. During the three and nine months ended September30, 2008, the segment incurred pre-tax restructuring charges that reduced operating profit by $5.4million and $13.9million, respectively. Also impacting operating profit comparisons is an increase in incentive compensation of $13.0 and $5.5million for the three and nine month periods. The increase in incentive compensation reflects the impact of changes in the projected payout of restricted performance stock awards made in both periods. Financial Services The Financial Services segment operates under the Standard Poors brand. This segment provides services to investors, corporations, governments, financial institutions, investment managers and advisors globally. The segment and the markets it serves are impacted by interest rates, the state of global economies, credit quality and investor confidence. During the nine months ended September30, 2009, the segment incurred a net pre-tax restructuring benefit that increased operating profit by $0.4million. During the three and nine months ended September30, 2008, the segment incurred pre-tax restructuring charges that reduced operating profit by $4.1million and $19.3million, respectively. Also impacting operating profit comparisons is an increase in incentive compensation of $32.1 and $20.4million for the three and nine month periods. The increase in incentive compensation reflects the impact of changes in the projected payout of restricted performance stock awards made in both periods and the significant reductions in other incentive compensation during 2008. In addition, during the nine months ended September30, 2009, the segment incurred a pre-tax loss resulting from the sale of Vista Research, Inc. in May2009 that reduced operating profit by $13.8million. Information Media The Information Media segment includes business, professional and broadcast media, offering information, insight and analysis. During the nine months ended September30, 2009, the segment incurred a net pre-tax restructuring charge that reduced operating profit by $4.0million. During the three and nine months ended September30, 2008, the segment incurred a net pre-tax restructuring charge that reduced operating profit by $13.9million. Also impacting operating profit comparisons is an increase in incentive compensation of $5.7 and $1.0million for the three and nine month periods. The increase in incentive compensation reflects the impact of changes in the projected payout of restricted performance stock awards made in both periods. General Corporate Ex

Acquisitions and Dispositions

Acquisitions and Dispositions
	9 Months Ended Sep. 30, 2009 USD / shares
Acquisitions and Dispositions [Abstract]
Acquisitions and Dispositions	4. Acquisitions and Dispositions In May2009, we sold our Vista Research, Inc. business which was part of the Financial Services segment. This business was selected for divestiture, as it no longer fit within our strategic plans. This divestiture enables the Financial Services segment to focus on its core business of providing independent research, ratings, data indices and portfolio services. During the nine months ended September30, 2009, we recognized a pre-tax loss of $13.8million ($8.8million after-tax or $0.03 per diluted share), recorded as other loss. For the three and nine months ended September30, 2009 and 2008, all dispositions including the sale of Vista Research are immaterial to us individually and in the aggregate. For the three and nine months ended September30, 2009 and 2008, we made no material acquisitions, individually and in the aggregate. On October13, 2009, we entered into an agreement to divest BusinessWeek, which is part of our Information Media segment. This business was selected for divestiture as it no longer fit within our strategic plans. The transaction is expected to close during the fourth quarter of 2009 and is projected to result in a pre-tax gain of $9.3million ($5.9million after tax or $0.02 per diluted share).

Stock Based Compensation

Stock Based Compensation
	9 Months Ended Sep. 30, 2009 USD / shares
Share-Based Compensation [Abstract]
Stock-Based Compensation	5. Stock-Based Compensation Stock-based compensation for the periods ended September30 is as follows: Three Months Nine Months 2009 2008 2009 2008 Stock option expense $ 4,691 $ 6,879 $ 15,862 $ 20,320 Restricted stock awards expense (9,441 ) (46,315 ) (3,379 ) (16,756 ) Total stock-based compensation expense ($4,750 ) ($39,436 ) $ 12,483 $ 3,564 In the third quarter of 2008, we reduced the projected payout percentages for our outstanding restricted stock awards. During the third quarter of 2009, we further reduced the projected payout percentages on certain of our outstanding restricted stock awards. Accordingly, we recorded adjustments to reduce our stock-based compensation expense for the amount of previously recognized expense in excess of the revised projected payouts. The effect of these adjustments resulted in a beneficial impact on total stock-based compensation expense for the three month periods ending September30, 2009 and 2008. The number of common shares issued upon exercise of stock options and the vesting of restricted stock awards are as follows: September 30, December 31, September 30, (in thousands) 2009 2008 2008 Stock options exercised 483 1,433 1,424 Restricted stock vested 1,425 678 674 Total shares issued 1,908 2,111 2,098

Allowances, Inventories and Acc

Allowances, Inventories and Accumulated Amortization of Prepublication Costs
	9 Months Ended Sep. 30, 2009 USD / shares
Allowances, Inventories and Accumulated Amortization of Prepublication Costs [Abstract]
Allowances, Inventories and Accumulated Amortization of Prepublication Costs	6. Allowances, Inventories and Accumulated Amortization of Prepublication Costs The allowances for doubtful accounts and sales returns, the components of inventory and the accumulated amortization of prepublication costs are as follows: September 30, December 31, September 30, 2009 2008 2008 Allowance for doubtful accounts $ 69,874 $ 76,341 $ 69,412 Allowance for sales returns $ 229,490 $ 192,344 $ 226,003 Inventories: Finished goods $ 330,416 $ 349,203 $ 403,976 Work-in-process 2,184 4,359 6,060 Paper and other materials 6,397 16,117 13,743 Total inventories $ 338,997 $ 369,679 $ 423,779 Accumulated amortization of prepublication costs $ 967,657 $ 943,022 $ 905,524

Debt

Debt
	9 Months Ended Sep. 30, 2009 USD / shares
Debt [Abstract]
Debt	7. Debt A summary of short-term and long-term debt outstanding follows: September 30, December 31, September 30, 2009 2008 2008 5.375% Senior notes, due 2012 (a) $ 399,780 $ 399,727 $ 399,709 5.900% Senior notes, due 2017 (b) 399,224 399,152 399,128 6.550% Senior notes, due 2037 (c) 398,521 398,482 398,469 Commercial paper 70,000 307,100 Note payable 244 272 281 Total debt 1,197,769 1,267,633 1,504,687 Less: short-term debt including current maturities 22 70,022 307,122 Long-term debt $ 1,197,747 $ 1,197,611 $ 1,197,565 Senior Notes (a)As of September30, 2009, we had outstanding $399.8million of 2012 senior notes consisting of $400million principal and an unamortized debt discount of $0.2million. The 2012 senior notes, when issued in November2007, were priced at 99.911% with a yield of 5.399%. Interest payments are required to be made semiannually on February15 and August15. (b)As of September30, 2009, we had outstanding $399.2million of 2017 senior notes consisting of $400million principal and an unamortized debt discount of $0.8million. The 2017 senior notes, when issued in November2007, were priced at 99.76% with a yield of 5.933%. Interest payments are required to be made semiannually on April15 and October15. (c)As of September30, 2009, we had outstanding $398.5million of 2037 senior notes consisting of $400million principal and an unamortized debt discount of $1.5million. The 2037 senior notes, when issued in November2007, were priced at 99.605% with a yield of 6.580%. Interest payments are required to be made semiannually on May15 and November15. Available Financing The size of our total commercial paper program remains $1.2billion and is supported by the revolving credit agreements described below. There were no commercial paper borrowings outstanding at September30, 2009. Commercial paper borrowings outstanding at December31, 2008 totaled $70.0million, with an average interest rate and average term of 1.4% and 29days. Commercial paper borrowings outstanding at September30, 2008 totaled $307.1million, with an average interest rate and average term of 2.5% and 9days. These total borrowings are classified as current notes payable in the consolidated balance sheet. On September12, 2008 we closed on a revolving credit facility agreement totaling $1.15billion collectively (the credit facility) to replace the previous $1.2billion five-year credit facility that was to expire on July20, 2009. The $1.15billion credit facility consisted of two separate tranches, a $383.3million 364-day facility and a $766.7million 3-year facility. A syndicate of fourteen banks led by JP Morgan and Bank of America participated in the credit facility. The previous credit facility was cancelled after the new credit facility became effective. On August14, 2009 we entered into a new $433.3million 364-day revolving credit facility (t

Common Shares Outstanding

Common Shares Outstanding
	9 Months Ended Sep. 30, 2009 USD / shares
Common Shares Outstanding [Abstract]
Common Shares Outstanding	8. Common Shares Outstanding A reconciliation of the number of shares used for calculating basic and diluted earnings per common share for the periods ended September30 is as follows: Three Months Nine Months (in thousands) 2009 2008 2009 2008 Average number of common shares outstanding 312,471 313,105 312,067 316,969 Effect of stock options and other dilutive securities 1,171 4,098 833 3,631 Average number of common shares outstanding including the effect of dilutive securities 313,642 317,203 312,900 320,600 Restricted performance shares outstanding of 3.7million and 2.4million at September30, 2009 and 2008, respectively, were not included in the computation of diluted earnings per common share because the necessary vesting conditions have not yet been met. The weighted-average diluted shares outstanding for the three and nine months ended September 30, 2009, excludes the effect of approximately 23.9million and 28.7million, respectively, of outstanding stock options because the effects were not dilutive. The weighted-average diluted shares outstanding for the three and nine months ended September30, 2008, excludes the effect of approximately 16.0million for both periods, of outstanding stock options because the effects were not dilutive.

Retirement Plans and Postretire

Retirement Plans and Postretirement Healthcare and Other Benefits
	9 Months Ended Sep. 30, 2009 USD / shares
Retirement Plans and Postretirement Healthcare and Other Benefits [Abstract]
Retirement Plans and Postretirement Healthcare and Other Benefits	9. Retirement Plans and Postretirement Healthcare and Other Benefits A summary of net periodic benefit cost for our defined benefit plans and postretirement healthcare and other benefits plan for the periods ended September30 is as follows: Three Months Nine Months Pension Benefits 2009 2008 2009 2008 Service cost $ 14,648 $ 14,703 $ 43,443 $ 44,183 Interest cost 21,722 21,628 64,603 64,961 Expected return on plan assets (26,411 ) (27,675 ) (78,580 ) (83,119 ) Amortization of prior service credit (80 ) (109 ) (209 ) (331 ) Amortization of loss 1,397 800 4,111 2,408 Net periodic benefit cost $ 11,276 $ 9,347 $ 33,368 $ 28,102 Three Months Nine Months Postretirement Healthcare and Other Benefits 2009 2008 2009 2008 Service cost $ 597 $ 593 $ 1,857 $ 1,780 Interest cost 2,075 2,114 6,283 6,340 Amortization of prior service credit (297 ) (297 ) (890 ) (890 ) Net periodic benefit cost $ 2,375 $ 2,410 $ 7,250 $ 7,230 The amortization of prior service credit and amortization of loss for the three and nine months ended September30, 2009 and 2008, included in the above table, have been recognized in the net periodic benefit cost and included in other comprehensive income, net of tax. In 2009, the expected rate of return on plan assets is 8.0% based on a market-related value of assets, which recognizes changes in market value over five years. We changed certain assumptions on our pension and postretirement healthcare and other benefit plans which became effective on January1, 2009: We changed our discount rate assumption on our U.S. retirement plans to 6.10% from 6.25% in 2008. We changed our discount rate assumption on our United Kingdom (U.K.) retirement plan to 5.8% from 5.4% in 2008 and our assumed compensation increase factor for our U.K. retirement plan to 5.50% from 5.95%. We changed our discount rate and healthcare cost trend rate assumptions on our postretirement healthcare benefit plan. In 2009, the discount rate assumption changed to 5.95% from 6.0% in 2008, and the healthcare cost trend rate changed to 8.0% from 8.5% in 2008. The effect of the assumption changes on pension and other postretirement healthcare expense for the three and nine months ended September30, 2009 did not have a material effect on earnings per share. In 2009, we contributed approximately $20.5million to our retirement plans. Additionally, for the rest of 2009 we expect to contribute approximately $18.8million to our retirement plans.

Sale Leaseback Transaction

Sale Leaseback Transaction
	9 Months Ended Sep. 30, 2009 USD / shares
Sale-Leaseback Transaction [Abstract]
Sale-Leaseback Transaction	10. Sale-Leaseback Transaction In December2003, we sold our 45% equity investment in Rock-McGraw, Inc., which owns our headquarters building in New York City. The transaction was valued at $450.0million, including assumed debt. Proceeds from the disposition were $382.1million and the sale resulted in a pre-tax gain of $131.3million ($58.4million after-tax) in 2003. We remain an anchor tenant of what continues to be known as The McGraw-Hill Companies building and will continue to lease space from Rock-McGraw, Inc., under an existing lease through 2020. As of December31, 2008, we leased approximately 17% of the building space. This lease is being accounted for as an operating lease. Pursuant to sale-leaseback accounting rules, as a result of our continued involvement, a pre-tax gain of approximately $212.3million ($126.3million after-tax) was deferred and is being amortized over the remaining lease term as a reduction in rent expense. Information relating to the sale-leaseback transaction for the periods ended September30 is as follows: Three Months Nine Months 2009 2008 2009 2008 Reduction in rent expense $ (4,592 ) $ (4,592 ) $ (13,775 ) $ (13,775 ) Interest expense $ 1,884 $ 2,007 $ 5,746 $ 6,110

Income Taxes

Income Taxes
	9 Months Ended Sep. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	11. Income Taxes At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect, and are individually computed are recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or as the tax environment changes. For the three and nine months ended September30, 2009, the effective tax rate was 36.4%. For the three and nine months ended September30, 2008, the effective tax rate was 37.1% and 37.0%, respectively. The decrease in the effective tax rate for the three and nine months ended September30, 2009 as compared to the same periods last year is primarily attributable to a decrease in state and local income taxes. Effective January1, 2009, we adopted FASB ASC 810-10-65-1 which requires separate presentation of noncontrolling interests on our financial statements. This resulted in a change to the calculated effective tax rate for both the current and prior periods.

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies The following amends the disclosure in Footnote 15 Commitments and Contingencies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2008. In the normal course of business both in the United States and abroad, the Registrant and its subsidiaries are named as defendants in numerous legal proceedings and are involved, from time to time, in governmental and self-regulatory agency proceedings, which may result in adverse judgments, damages, fines or penalties. Also, various governmental and self-regulatory agencies regularly make inquiries and conduct investigations concerning compliance with applicable laws and regulations. Following developments in the subprime residential mortgage market, and the credit and financial markets more generally, we, together with other credit rating agencies, continue to be named in numerous lawsuits relating to the ratings activity of Standard Poors Ratings Services by alleged purchasers of rated securities, many of which include novel claims that we are an underwriter or a seller under the Securities Act of 1933. There are currently pending numerous lawsuits in U.S. state and federal courts, as well as in foreign jurisdictions, asserting claims under a variety of state and federal laws, including the federal securities laws, relating to ratings activity in Financial Services, Public Finance and Structured Finance areas, as well as a lawsuit relating to the rating of Parmalat Finanziaria S.p.A. and Parmalat S.p.A. that was filed in 2005. We have also received numerous subpoenas and other government inquiries concerning our ratings activity in these areas and continue to respond to all such requests. Additional actions, investigations or proceedings have been initiated and may be initiated from time to time in the future. In addition, as further described in Footnote 15 of our Annual Report on Form 10-K for the year ended December31, 2008, we and certain of our officers and directors have been named in a putative class action brought under the federal securities laws by our shareholders, two putative class actions by participants in our ERISA plans, and a putative derivative action on our behalf, all relating to alleged misrepresentations and omissions concerning our ratings business. In connection with the Blomquist v. Washington Mutual, et al. action described in Footnote 15 to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December31, 2008, the plaintiff was granted permission to file an appeal of the decision dismissing all claims against us and Mr.McGraw six months after his deadline to do so had passed. We filed our opposition brief in August2009. In connection with the Abu Dhabi Commercial Bank v. Morgan Stanley Incorporated, et al. action described in Footnote 15 to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December31, 2008, our motion to dismiss the 11 claims asserted against us was granted with respect to 10 claims and denied with respect to one, a common law fraud claim. Di

Restructuring

Restructuring
	9 Months Ended Sep. 30, 2009 USD / shares
Restructuring [Abstract]
Restructuring	13. Restructuring 2009 Restructuring During the second quarter 2009, we initiated a restructuring plan that included a realignment of select business operations within the McGraw-Hill Education segment to further strengthen our position in the market by creating a market focused organization that enhances our ability to address the changing needs of our customers. Additionally, we continued to implement restructuring plans related to a limited number of our business operations to contain costs and mitigate the impact of the current and expected future economic conditions. We recorded a pre-tax restructuring charge of $24.3million, consisting primarily of employee severance costs related to a workforce reduction of approximately 550 positions. This charge consisted of $14.0 million for McGraw-Hill Education, $4.5million for Financial Services and $5.8million for Information Media. In addition, during the second quarter 2009, we revised our estimate for previously recorded restructuring charges and reversed approximately $9.1million, consisting of $2.4million for McGraw-Hill Education, $4.9million for Financial Services and $1.8million for Information Media. The net after-tax charge recorded was $9.7million, or $0.03 per diluted share. Net restructuring expenses for McGraw-Hill Education were $11.6million classified as selling and general product expenses, within the statement of income. Net restructuring benefit for Financial Services was $0.4million classified as selling and general service expenses within the statement of income. Net restructuring expenses for Information Media were $2.3million classified as selling and general service expenses, and $1.7million classified as selling and general product expenses, within the statement of income. For the three and nine months ended September30, 2009, we have paid approximately $7.3million related to the 2009 restructuring, consisting primarily of employee severance costs. The 2009 restructuring reserve at September30, 2009 is approximately $17.0million and is included in other current liabilities. 2008 Restructuring During 2008, we continued to implement restructuring plans related to a limited number of our business operations to contain costs and mitigate the impact of the current and expected future economic conditions. We recorded a pre-tax restructuring charge of $73.4million, consisting primarily of employee severance costs related to a workforce reduction of approximately 1,045 positions. This charge consisted of $25.3million for McGraw-Hill Education, $25.9million for Financial Services, $19.2million for Information Media and $3.0million for Corporate. The after-tax charge recorded was $45.9million, or $0.14 per diluted share. Restructuring expenses for McGraw-Hill Education were $20.8million classified as selling and general product expenses, and $4.5million classified as selling and general service expenses, within the statement of income. Restructuring expenses for Financial Services were classified as selling and general service expenses within the statement of income. Restructuring expenses for Information Media were $18.9m

Recently Issued Accounting Stan

Recently Issued Accounting Standards
	9 Months Ended Sep. 30, 2009 USD / shares
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting Standards	14. Recently Issued Accounting Standards In October2009, the FASB issued FASB Accounting Standards Update (FASB ASU) No.09-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (a consensus of the FASB Emerging Issues Task Force) (FASB ASU 09-13). FASB ASU 09-13 updates the existing multiple-element arrangement guidance currently in FASB ASC 605-25 (Revenue Recognition-Multiple-Element Arrangements). This new guidance eliminates the requirement that all undelivered elements have objective and reliable evidence of fair value before a company can recognize the portion of the overall arrangement fee that is attributable to the items that have already been delivered. Further, companies will be required to allocate revenue in arrangements involving multiple deliverables based on the estimated selling price of each deliverable, even though such deliverables are not sold separately by either the company itself or other vendors. This new guidance also significantly expands the disclosures required for multiple-element revenue arrangements. The revised guidance will be effective for the first annual period beginning on or after June15, 2010. We are currently evaluating the impact FASB ASU 09-13 will have on our consolidated financial statements. In December2008, the FASB issued FASB ASC 715-20-65-2, Compensation-Retirement Benefits (FASB ASC 715-20-65-2). FASB ASC 715-20-65-2 provides guidance on an employers disclosure about plan assets of a defined benefit pension or other postretirement plan. FASB ASC 715-20-65-2 is effective for fiscal years ending after December15, 2009. We are currently evaluating the impact FASB ASC 715-20-65-2 will have on our consolidated financial statements.