- Corporation Reaffirms Double-Digit Earnings Growth for 2005 -

NEW YORK, Jan. 5 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies (NYSE: MHP) today announced that it had restructured a limited number of business operations in the fourth quarter of 2005 to enhance the Corporation's long-term growth prospects.

"We are focused on extending the record of consistent growth achieved over the past decade, and the restructuring activities we completed in the fourth quarter have strengthened key capabilities, lowered costs and allowed us to direct resources to areas with the greatest potential for continued growth in the years ahead," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies.

The Corporation will incur a restructuring charge of $23.2 million pre-tax, consisting mostly of employee severance costs related to the reduction of approximately 500 positions across the Corporation. The total restructuring charge after tax is $14.6 million, or $0.04 per diluted share of fourth quarter 2005 earnings.

"Though it is difficult to reduce staff, the prudent steps we have taken allow us to sharpen our focus entering 2006 and the years ahead," said Mr. McGraw.

The Information and Media Services segment accounted for $10.2 million of the restructuring charge. Restructuring activities comprised the previously announced repositioning of BusinessWeek in global markets, including the discontinuation of regional print editions in Europe and Asia. Additional actions within this segment were taken to consolidate and strengthen the sales, customer support and ordering functions supporting the Corporation's aviation, energy and construction information businesses.

Activities within McGraw-Hill Education resulted in $9.0 million of the restructuring charge, and were focused primarily on CTB/McGraw-Hill, a leader in educational assessment. CTB reallocated resources from its California operations to newly established regional offices, and also consolidated its technology operations and broadened its partnerships with outside vendors. Other activities within the Education segment included the centralization of finance and other shared services within the professional and international publishing units.

The impact of restructuring within the Financial Services segment was $1.2 million and focused on the elimination of certain staff and process redundancies through the consolidation of several support functions.

Restructuring of Corporate activities contributed $2.8 million to the total charge and included outsourcing of select information technology and business process functions to strengthen capabilities and lower operating costs. The Corporation closed an administrative services center and established alliances with external partners to meet product support and other technology needs.

The McGraw-Hill Companies also reaffirmed today that including the impact of restructuring actions it will achieve double-digit growth in earnings per share from continuing operations in 2005.

"We had another year of strong growth and I am pleased to report that for 2005 The McGraw-Hill Companies expects double-digit growth in earnings per share from continuing operations, including $0.04 in restructuring charges, $0.03 dilution from income tax on the repatriation of funds, $0.08 to $0.09 dilution from acquisitions in 2004 and 2005 and changes in pension plan assumptions for 2005, but excluding a $0.01 gain on the sale of Corporate Value Consulting and the 2004 non-cash benefit of $0.05 from accrued tax liabilities," said Mr. McGraw. "Our businesses are well-prepared to continue meeting the long-term opportunities that exist within each of our markets."

The Corporation will release its fourth quarter 2005 financial results before the start of NYSE trading on Wednesday, January 25th.

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 290 offices in 38 countries. Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com.

SOURCE  The McGraw-Hill Companies
    -0-                             01/05/2006
    /CONTACT:  Media Relations:
               Steven H. Weiss
               Vice President, Corporate Communications
               The McGraw-Hill Companies
               (212) 512-2247 (office)
               (917) 699-9389 (mobile)
               weissh@mcgraw-hill.com

               Investor Relations:
               Donald S. Rubin
               Senior Vice President, Investor Relations
               The McGraw-Hill Companies
               (212) 512-4321 (office)
               (212) 512-3840 (fax)
               donald_rubin@mcgraw-hill.com/
    /Web site:  http://www.mcgraw-hill.com /
    (MHP)

CO:  The McGraw-Hill Companies
ST:  New York
IN:  FIN PUB
SU:  RCN

EM
-- NYTH028 --
4374 01/05/200608:47 ESThttp://www.prnewswire.com