Monday, October 26, 2009

McGraw-Hill Unanswered Questions

The McGraw-Hill (MHP) people reported more tales of woe. Here are a few items which management puts into the press release and then really fails to follow up with adequate explanation.

BusinessWeek as a brand has experienced approximately 28% declines in ad revenue. We all believe that Bloomberg took it off their hands. But no one is truly sure of the details. It was worth a billion dollars a few years ago. We are fairly certain that MHP is not declaring a capital gain. No info on possible ramifications in any fashion.

Under costs they put out this quote “we reduced total costs and expenses by 5.4% despite a $68 million increase in incentive compensation after substantial reductions in 2008” They really need to explain their compensation system. Who got the money and why?