The McGraw-Hill Companies Sells Its Interest In the Corporation's Rockefeller Center Headquarters Building

NEW YORK, Dec. 29 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies (NYSE: MHP) announced today that it has sold its 45% interest in Rock-McGraw, Inc., which owns the Corporation's headquarters building at 1221 Avenue of the Americas, New York City, to SL Green Realty Corp. (NYSE: SLG) in a transaction valued at $450 million for its 45% interest.

The Corporation will remain an anchor tenant of what will continue to be known as The McGraw-Hill Companies building and will continue to lease space from Rock-McGraw, Inc. under an existing lease for the next 17 years. The Corporate headquarters offices and two of its businesses, BusinessWeek and Standard & Poor's Corporate Value Consulting, remain at the Rockefeller Center location.

"This sale is consistent with our strategy of directing our resources toward opportunities to develop and expand our financial services, education and business information franchises," said Harold McGraw III, chairman, CEO and president of The McGraw-Hill Companies. "With the current strength of the commercial real estate market in New York, this proved to be the right time to divest our investment in non-core activities."

In line with this strategy, The McGraw-Hill Companies has long-term leases, rather than ownership interests, at many of its major offices, including 2 Penn Plaza and 55 Water Street in New York City and its new London headquarters at Canary Wharf.

As a result of this sale, the Corporation expects to record a gain of approximately $131 million ($58 million after-tax) during the fourth quarter of 2003. For the year, the gain will add approximately $0.30 to the Corporation's reported earnings per share. Pursuant to sale-leaseback accounting rules, a gain of approximately $212 million ($126 million after-tax) will be deferred and amortized over the remaining lease term largely as a reduction in rent expense. The impact of this transaction is expected to dilute 2004 earnings by only one to two cents per share, after taking into account the reduction of future rent expense, interest income, and the loss of 45% of Rock-McGraw's earnings.

The Rockefeller Group maintains its 55% ownership of Rock-McGraw, Inc., and will continue to manage the building. "We look forward to continuing our excellent relationship with the Rockefeller Group and its new partner, SL Green, which is also an experienced owner of prime commercial real estate in New York City," Mr. McGraw said.

Woody Heller and CB Richard Ellis represented The McGraw-Hill Companies on the sale of its interest in 1221 Avenue of the Americas. Mr. Heller is now with the Capital Transaction Group at Studley.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, BusinessWeek and McGraw-Hill Education. The Corporation has more than 320 offices in 34 countries. Sales in 2002 were $4.8 billion. Additional information is available at http://www.mcgraw-hill.com.

CONTACT:
Steven H. Weiss
Vice President, Corporate Communications
The McGraw-Hill Companies
212-512-2247 (office)
917-374-2024 (mobile)
weissh@mcgraw-hill.com


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