Equity

9 Months Ended

Sep. 30, 2011

Equity [Abstract]

Equity

9. Equity

Stock Repurchases

In 2007 the Board of Directors approved a stock repurchase program authorizing the purchase of up to 45.0 million shares (the “2007 Repurchase Program”). On June 29, 2011, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to 50.0 million shares (the “2011 Repurchase Program”), which was approximately 17% of the total shares of our outstanding common stock at that time. Share repurchases under both the 2007 and the 2011 Repurchase Programs for the periods ended September 30 were as follows:

	2011						2010
	Total						Total
	number of		Average				number of		Average
	shares		price paid		Total cash		shares		price paid		Total cash
	purchased		per share1		utilized2		purchased		per share		utilized
Three months		9.0	$	39.40	$	354.7		2.2	$	31.14	$	69.0
Nine months		16.7	$	39.20	$	655.0		8.7	$	29.37	$	255.8

1

In June of 2011, we repurchased approximately 2.5 million shares under our 2007 Repurchase Program from the holdings of the Harold W. McGraw, Jr. Trust (the “Trust”) and the Harold W. McGraw, Jr. Family Foundation, Inc., a Connecticut non-stock corporation (the “Foundation”). The shares were purchased at a discount of 1.375% from the June 23, 2011 New York Stock Exchange closing price through a private transaction with the trustees of the Trust and the Board of Directors of the Foundation. We repurchased these shares with cash for $97.0 million. Without this discounted repurchase, the average price paid per share for the nine months ended September 30, 2011 would have been $39.14. The transaction was approved by the Nomination and Corporate Governance and Financial Policy Committees of our Board of Directors and we received independent financial and legal advice for this transaction.

2

In any period, cash used in financing activities related to common stock repurchased may differ from the comparable change in equity, reflecting timing differences between the recognition of share repurchase transactions and their settlement for cash. As such, in the third quarter of 2011, 0.5 million shares were repurchased for $19.4 million, which settled in October 2011.

Our purchased shares may be used for general corporate purposes, including the issuance of shares for stock compensation plans and to offset the dilutive effect of the exercise of employee stock options. During the three and nine months ended September 30, 2011, we repurchased 0.7 and 8.4 million shares, respectively, under the 2007 Repurchase Program. As of September 30, 2011, there were no remaining shares available under the 2007 Repurchase Program. During the three and nine months ended September 30, 2011, we repurchased 8.3 million shares under the 2011 Repurchase Program. As of September 30, 2011, 41.7 million shares remained available under the 2011 Repurchase Program. The 2011 Repurchase Program has no expiration date and purchases under this program may be made from time to time on the open market and in private transactions, depending on market conditions.

Comprehensive Income

The following table is a reconciliation of net income to comprehensive income, including comprehensive income attributable to our noncontrolling interests (“NCI”), for the periods ended September 30:

	Three Months						Nine Months
	2011			2010			2011			2010
Net income	$	373.9		$	389.7		$	713.8		$	690.9
Other comprehensive income, net of tax:
Foreign currency translation adjustment		(57.1	)		24.1			(23.3	)		4.1
Pension and other postretirement benefit plans		4.6			2.1			19.1			10.8
Unrealized loss on investment and forward exchange contracts		(0.1	)		(0.1	)		(6.2	)		(0.3	)
Comprehensive income		321.3			415.8			703.4			705.5
Less: comprehensive income attributable to NCI		(1.8	)		(10.0	)		(12.3	)		(19.2	)
Comprehensive income attributable to the Company	$	319.5		$	405.8		$	691.1		$	686.3