Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares is increased to include additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Potential common shares consist primarily of stock options, restricted stock and restricted stock units calculated using the treasury stock method. The calculation for basic and diluted EPS for the periods ended June 30 is as follows:

(in millions, except per share amounts)	Three Months Ended				Six Months Ended
	2012		2011		2012		2011
Amounts attributable to The McGraw-Hill Companies, Inc. common shareholders:
Income from continuing operations	$	216	$	211	$	339	$	332
Loss from discontinued operations, net of tax	—		—		—		(1		)
Net income attributable to the Company	$	216	$	211	$	339	$	331
Basic weighted-average number of common shares outstanding	279.7		303.6		278.9		304.4
Effect of stock options and other dilutive securities	5.6		5.6		5.6		5.0
Diluted weighted-average number of common shares outstanding	285.3		309.2		284.5		309.4
Basic EPS:
Income from continuing operations	$	0.77	$	0.70	$	1.22	$	1.09
Loss from discontinued operations, net of tax	—		—		—		—
Net income	$	0.77	$	0.70	$	1.22	$	1.09
Diluted EPS:
Income from continuing operations	$	0.76	$	0.68	$	1.19	$	1.07
Loss from discontinued operations, net of tax	—		—		—		—
Net income	$	0.76	$	0.68	$	1.19	$	1.07

Restricted performance shares outstanding of 1.4 million and 1.6 million as of June 30, 2012 and June 30, 2011, respectively, were not included in the computation of diluted EPS because the necessary vesting conditions had not been met.

The effect of the potential exercise of stock options is excluded from the computation of diluted EPS when the average market price of our common stock is lower than the exercise price of the related option during the period because the effect would have been antidilutive. For the three months ended June 30, 2012 and 2011, the number of stock options excluded from the computation was 3.8 million and 10.0 million, respectively, and 4.0 million and 10.8 million for the six months ended June 30, 2012 and 2011, respectively.