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  "documentTitle": "The McGraw-Hill Companies (MHP)",
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  "presentationDate": "2011-08-22 00:00:00",
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      "kind": "callout",
      "text": "MH Education’s performance is a drag on other McGraw-Hill businesses.",
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      "text": "MH Education's performance is a drag on other McGraw-Hill businesses.",
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      "text": "The weak link in the MHP earnings outlook near-term is the educational publishing unit, reflecting heavy spending on digital initiatives and a difficult K-12 funding environment. While we see long-term payoff from the digital migration (as evidenced by the higher margins achieved in the more technologically advanced college business), we expect spending to constrain margins in 2011 and 2012” - Piper Jaffray, May 19, 2011(3)",
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      "text": "We think that MHP could evaluate a potential sale/spin of the Education segment (22% of MHP profits). We view the Education properties as relatively low growth (LSD) and low margin (essentially 10-15% since 1995) — which put it at odds with much of S&P Ratings, M-H Financial, and Platts. Education has also struggled in recent years amid tough times for local/state budgets, and lagged competitor Pearson.” - J.P. Morgan, August 1, 2011(1)",
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      "text": "Consider the following - 1) the financial profile of Education (more capital intensive, lower returns, cyclical ~ K-12) is less attractive vs. McGraw-Hill Financial Services, in our opinion; 2) McGraw-Hill Education has been losing share in both el-hi and college for the last several years which we think is at least partially due to ‘under-investment’ in these businesses (at least on a relative basis) - School revenue is nearly -30% off its '05 peak, the company's legacy testing biz (norm-referenced testing) has been hurt by NCLB, and the higher education digital strategy has generally trailed competitors” - Stifel Nicolaus, August 2, 2011(2)",
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      "text": "\"We think that MHP could evaluate a potential sale/spin of the Education segment (22% of MHP profits). We view the Education properties as relatively low growth (LSD) and low margin (essentially 10-15% since 1995) — which put it at odds with much of S&P Ratings, M-H Financial, and Platts. Education has also struggled in recent years amid tough times for local/state budgets, and lagged competitor Pearson.\" — J.P. Morgan, August 1, 2011",
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      "kind": "source-note",
      "text": "(1) “Activists Coming”; Michael A. Meltz; J.P. Morgan; August 1, 2011. (2) “The McGraw-Hill Companies”; Drew E. Crum and David Pang; Stifel Nicolaus; August 2, 2011.",
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      "kind": "title",
      "text": "MH Education’s Weak Structural Position",
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