Hurt by a 14% decline in revenue in its school group, total revenue at McGraw-Hill Education fell 6% in 2011, to $2.29 billion, parent company the McGraw-Hill Cos. reported Tuesday morning. Operating income fell 12%, to $320 million. During the year, MHE took a $34 million restructuring charge for severance related to a workforce reduction of about 540 positions made in the fourth quarter. MHC is in the process of spinning off MHE as a separate company, but there was no timetable on when the separation will be completed.

While the school group had a down year, the higher education/professional/international group posted a 1% increase in the year, to $1.3 billion, helped by a good fourth quarter in which sales rose 8%. In the higher education segment, digital sales grew by more than 40%, and the U.S. higher education closed the fourth quarter in 2011 on an upswing, MHC said. Digital revenue represented more than 20% of U.S. higher education total sales in 2011. Rapid growth in e-book sales helped to offset a decline in print book sales in the professional segment in the year and digital products accounted for nearly 30% of sales last year. The professional unit has more than 6,000 e-books and also offers subscriptions to McGraw-Hill’s online products and services in science, medicine and engineering. In addition, the professional group has more than 200 apps across medical, technical, business, and other test preparation categories. In international markets, revenue finished the full year slightly below 2010. During 2011, growth in Latin America, India and Canada was offset by lower sales in Asia, Europe, the Middle East and Africa where regional conditions affected some markets.

Revenue in the school group decreased to $949 million. According to MHC, reduced instructional materials funding in the face of state and local budget pressures led to a 13% decrease in 2011 state new adoption market opportunities compared to 2010 and a decline in open territory sales for the fourth quarter and the full year 2011. For the MHE school group in particular, the drop in revenue was primarily driven by a reduced participation rate in the 2011 new adoption market in several states due to an uncertain outlook for funding and by challenging comparisons in Texas and Florida, where large orders in 2010 did not repeat owing to the change in subject categories being purchased.

In a statement, MHC chairman Terry McGraw said the performance of the company in 2012 “will be significantly influenced by the timing of separation and additional cost reduction actions that are still ahead of us. As new leadership teams are formed and implementation plans are finalized, we will provide regular updates on our progress throughout the year. 2012 will be a landmark year in the Corporation’s history and I am truly excited to launch two new McGraw-Hill companies.”