Combines 100 Years of Education Excellence and the Latest Innovations To Improve Student Achievement
Creates Specialized Intervention and College & Career Readiness Groups to Deliver More Effective Solutions for Critical Education Issues
Corporation Takes Second Quarter Net Charge of $0.03 to Realign Education and Other Business Segments
NEW YORK, July 16 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies (NYSE: MHP) today announced that McGraw-Hill Education (MHE), the premier education partner for schools nationwide, has created a comprehensive, achievement-focused PreK-12 organization uniquely positioned to improve student success and develop the 21st Century skills students need to excel in postsecondary education and the workplace. This new approach strengthens MHE's ability to address the changing needs of educators and better positions the company to capitalize on near- and long-term growth opportunities.
"As today's students prepare to take their place as productive workers and informed citizens in our interconnected world, they require skills well beyond those of previous generations," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "Through our new approach, we will be better able to use our proven programs and digital platforms to partner closely with educators and provide schools with comprehensive, performance-enhancing learning solutions that will prepare students for the world that awaits."
Unique Approach to Addressing Critical Education Issues
McGraw-Hill Education will focus its broad and deep educational expertise in four specialized "Learning Solution Centers" designed to promote educational excellence, improve student performance, and more effectively address such critical issues as drop-out prevention, students who have fallen behind, college and career readiness, and the development of 21st Century skills.
- A unique Intervention and Special Needs Center will focus on drop-out prevention and ensuring that struggling students get the instruction they need. The Center will offer schools and teachers the tools to provide individualized data-driven instruction, allowing students to develop the educational foundation necessary to succeed at all levels of education and beyond.
- A specialized College and Career Readiness Center will work to ensure students graduate high school with new skills necessary to succeed in postsecondary education as well as in the fastest-growing jobs in today's global economy - many of which require advanced training and education.
- A Literacy and Humanities Center has been designed to help students establish concrete skills in these critical areas.
- A STEM (Science, Technology, Engineering and Math) Center will help address the critical need to improve math, algebraic, science and technology competencies so students can compete in an increasingly global and high-tech society.
MHE will combine its core basal publishing operations, the School Solutions Group, with its unique basal and supplemental publishing operations, the Learning Group, to offer educators the broadest, most comprehensive range of programs and services to choose from. To help drive individual student achievement progressively across all grades, MHE will continue to develop programs with a comprehensive PreK-12 approach, while bringing its unmatched depth of understanding and energy to each academic discipline.
"Schools, administrators and teachers face increasing challenges to advancing student achievement. To be successful, they need a partner attuned to the specific needs of the children in their classrooms," said Peter C. Davis, president, McGraw-Hill Education. "Our new approach to the market, combined with our passion for educational excellence and significant insight into the needs of schools large and small, will enable us to partner with educators to ensure they receive the learning programs, materials, digital capabilities and support they require."
Bringing Today's Ever-Present Technology to the Classroom
Technology will be a key component of all four Learning Solution Centers. MHE's newly created Center for Digital Innovation is developing new digital solutions that will make learning more engaging for children and provide educators and parents with an effective technology-based teaching environment. Using these programs, teachers will be able to instantly assess student proficiency levels and customize instruction accordingly.
"Technology is deeply integrated into the lives of the millennium generation and is increasingly a part of their learning and classroom experience," said William Oldsey, executive vice president, McGraw-Hill Education. "Our programs, focused on how students use technology, will continue to bridge the gap between digital socialization and digital learning."
Building on a Successful Model
With all these changes, MHE will continue its tradition of serving as a trusted partner for teachers and school districts across the country. The company will build on the foundation of its very successful Urban Advisory Resource group. This team of experts consults with large urban districts across the country to help urban educators provide better quality instruction, curricula and assessment to their students. The district resource group is headed by Arthur Griffin Jr., a former member of the Charlotte-Mecklenburg school board for more than 17 years and its chair from 1997 to 2002.
Corporation Takes Additional Steps to Strengthen Core Offerings
In addition to strengthening its position as the partner of choice in the education market, the Corporation also announced today that it has realigned select business operations to further strengthen some of its other core offerings and to increase operating effectiveness and efficiencies.
"Our prudent fiscal management, cost controls and diverse portfolio of businesses have enabled The McGraw-Hill Companies to maintain its financial strength and profitability during the downturn," said Mr. McGraw. "Skilled and educated workforces, access to capital, and high-quality business information are all essential to global economic recovery. The actions we have announced today will help ensure we are ready to benefit from the increased demand expected in our key markets when the economy begins to improve, while also helping us manage costs in the current environment."
In connection with all these actions, the Corporation incurred a restructuring charge in the second quarter of 2009 of $24.3 million, pre-tax, consisting primarily of employee severance costs related to a workforce reduction of approximately 550 positions across the Corporation. The Corporation also recorded a reversal of $9.1 million for changes in severance estimates from prior restructuring initiatives, resulting in a net restructuring charge of $15.2 million, pre-tax, in the quarter. After taxes, the net charge was $9.7 million, or $0.03 per diluted share of second quarter 2009 earnings.
The following table summarizes the Corporation's second quarter 2009
The McGraw-Hill Companies
Second Quarter 2009 Restructuring Summary
(dollars in thousands, except for positions; unaudited)
Approximate Pre-Tax Pre-Tax Net Pre-Tax
# of Restructuring Restructuring Restructuring
Positions Charge Reversal Charge
------------ ------------- ------------- -------------
Education 340 $14,000 ($2,383) $11,617
Financial Services 85 4,479 (4,902) (423)
Information & Media 125 5,771 (1,783) 3,988
--- ----- ------ ------
Total Company 550 $24,250 ($9,068) $15,182
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In McGraw-Hill Education, the majority of the actions were related to the steps taken to support the segment's new PreK-12 organization.
In Financial Services, the actions were focused within S&P's Investment Services, which is the non-ratings portion of S&P's operations, and the primary drivers were steps taken to align resources more cost-effectively with the company's strategic outlook and growth opportunities in the market.
In Information & Media, the primary drivers were the shifting of resources to continue strengthening the company's digital offerings, as well as the consolidation and automation of certain functions to enable a better customer experience, greater coordination and faster execution, all while mitigating the impact of the current economic conditions.
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 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com.
Investor Relations: http://www.mcgraw-hill.com/investor_relations
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Release issued: July 16, 2009
SOURCE The McGraw-Hill Companies
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