1. Steve Dowling President, Pearson School Companies
Goldman Sachs Educational Publishing Mini-Conference March 22, 2005

2. Our businesses Pearson 2004 revenues $7.2bn
School revenues $2.1bn
FT 16%
US Publishing 46%
Penguin 21%
School 30%
US Testing & Software 23%
Professional 14%
International 31%
Higher Ed 19%
Note: sterling revenue are translated into US dollars at the year end rate of £1 : $1.92

3. Broad strength in K-12 #1 in 2003 and 2004 new state adoption business
Broad supplemental business with print and technology
Leader in high-stakes state assessments
Technologies critical to improving student performance
Extensive service and support infrastructure for integrated learning solutions

4. K-12 is a growth market
National priority — supported with steady and increasing funding legislation
Standards movement drives use of materials and assessment
State funding and adoption are favorable
Demand for “highly-qualified” teachers
Technology use in K-12 has reached the“tipping point”
Our products and services provide a safety net for student achievement and Adequate Yearly Progress

5. Healthy adoption opportunities 2005-2007$m
2004
2005E
2006E
2007E
Reading/literature
100
170
160
Math
300
110 40
220
Science 50
Social studies 10
210
130
Other
380 70
Total
500
900
620
750
Pearson participation
90%
75%
90%+

6. Integrated solutions to improve student performance
Accountability and alignment
Planning and implementation
Research and evaluation
Teacher professional development
District professional services

7. International education Education revenues outside the US
Note: McGraw-Hill and Thomson show $ revenues for 2003 & 2004 respectively, as reported. Pearson and Reed show £ revenues translated into $ at year end rate of £1:$1.92.

8. International Leadership
#1 in global English Language training
Leading school publisher in Hong Kong, South Africa, Canada, Singapore; local school publisher in 10 other countries
Leading school test publisher in UK; growing in Australia
Strong in Asia, largest ELT market
Leverage global resources