| Basis of Presentation |
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Basis of Presentation |
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The accompanying unaudited financial statements of The McGraw-Hill Companies, Inc. (together
with its consolidated subsidiaries, the “Company,” “we,” “us” or “our”) have been prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by U.S. GAAP for complete financial statements. Therefore, 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 December 31, 2010 (our “Annual Report”). |
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In the opinion of management all normal recurring adjustments considered necessary for a fair
statement of the results of the interim periods have been included. The operating results for
the three and nine months ended September 30, 2011 are not necessarily indicative of the results
that may be expected for the full year, partially due to the seasonal nature of some of our
businesses. As a result, we have included the Consolidated Balance Sheet as of September 30,
2010 for comparative purposes. Certain prior-year amounts have been reclassified to conform to
the current presentation. |
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We have reported our Broadcasting Group within our McGraw-Hill Information & Media (“I&M”)
segment, as a discontinued operation as of September 30, 2011. Accordingly, the results of
operations for all periods presented have been reclassified to reflect the business as a
discontinued operation and the assets and liabilities of the business have been reclassified as
held for sale for the periods presented. See Note 2 for further discussion. |
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On September 12, 2011, we announced that our Board of Directors have unanimously approved a
comprehensive Growth and Value Plan that includes separation into two public companies:
McGraw-Hill Markets (the working name for this company), primarily focused on capital and
commodities markets, and McGraw-Hill Education, focused on education services and digital
learning. Management is developing detailed separation plans, which will be subject to approval
by the Board of Directors. We expect to complete the transaction by the end of 2012 through a
tax-free spin-off of the education business to the Company’s shareholders, subject to various
conditions including final Board approval and a tax ruling from the Internal Revenue Service. |
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Our critical accounting estimates are disclosed in Item 7, Management’s Discussion and Analysis
of Financial Condition and Results of Operations, in our Annual Report. On an ongoing basis, we
evaluate our estimates and assumptions, including those related to revenue recognition,
allowance for doubtful accounts and sales returns, inventories, prepublication costs, accounting
for the impairment of long-lived assets (including other intangible assets), goodwill and
indefinite-lived intangible assets, retirement plans and postretirement healthcare and other
benefits, stock-based compensation, income taxes and contingencies. Since the date of our Annual
Report, there have been no material changes to our critical accounting policies and estimates. |
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