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

2. Our businesses Pearson 2004 revenues $7.2bn Higher Ed 19% Professional 14% Penguin 21% FT 16% School 2004 revenues $2.1bn US Publishing 46% International 31% US Testing & Software 23% School 30% 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 $m20042005E2006E2007E Reading/literature100 170160 Math30011040220 Science50100170 Social studies10210170130 Other4038070 Total500900620750 Pearson participation90%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