Notes to the
Accounts

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2a Analysis of sales

All figures in £ millions						2004	2003
Business sectors
Pearson Education						2,356	2,451
FT Group						587	588
The Penguin Group						786	840
Continuing operations						3,729	3,879
Discontinued operations						190	169
						3,919	4,048
Geographical markets supplied
United Kingdom						545	474
Continental Europe						300	294
North America						2,505	2,742
Asia Pacific						261	255
Rest of world						118	114
Continuing operations						3,729	3,879
Discontinued operations						190	169
						3,919	4,048
	2004				2003
All figures in £ millions	Total by source	Inter- regional	Total sales		Total by source	Inter- regional	Total sales
Geographical source of sales
United Kingdom	802	(57)	745		751	(60)	691
Continental Europe	174	(1)	173		166	-	166
North America	2,499	(2)	2,497		2,721	(2)	2,719
Asia Pacific	225	(2)	223		230	(1)	229
Rest of world	93	(2)	91		74	-	74
Continuing operations	3,793	(64)	3,729		3,942	(63)	3,879
Discontinued operations	190	-	190		169	-	169
	3,983	(64)	3,919		4,111	(63)	4,048

Note The table above analyses sales by the geographical region from which the products and services originate. Inter-regional sales are those made between Group companies in different regions.

Included within sales for 2004 is an amount of £10m attributable to acquisitions made during the year.

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2b Analysis of total operating profit

	2004
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit
Business sectors
Pearson Education	293	(174)	119
FT Group	86	(20)	66
The Penguin Group	54	(21)	33
Continuing operations	433	(215)	218
Discontinued operations	22	(9)	13
	455	(224)	231
Geographical markets supplied
United Kingdom	(26)	(30)	(56)
Continental Europe	21	(2)	19
North America	393	(177)	216
Asia Pacific	31	(5)	26
Rest of world	14	(1)	13
Continuing operations	433	(215)	218
Discontinued operations	22	(9)	13
	455	(224)	231
	2003
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit
Business sectors
Pearson Education	313	(207)	106
FT Group	58	(30)	28
The Penguin Group	91	(21)	70
Continuing operations	462	(258)	204
Discontinued operations	28	(6)	22
	490	(264)	226
Geographical markets supplied
United Kingdom	(46)	(31)	(77)
Continental Europe	1	(4)	(3)
North America	466	(218)	248
Asia Pacific	33	(5)	28
Rest of world	8	-	8
Continuing operations	462	(258)	204
Discontinued operations	28	(6)	22
	490	(264)	226

Note Discontinued operations relate to the disposal of the Group's interest in Recoletos, see note 31. Included within operating profit for 2004 is an amount of £1m attributable to acquisitions made during the year.

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2c Share of operating loss of joint ventures

	2004
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit/(loss)
Business sectors
Pearson Education	-	-	-
FT Group	(8)	-	(8)
The Penguin Group	1	-	1
Continuing operations	(7)	-	(7)
	2003
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit/(loss)
Business sectors
Pearson Education	-	-	-
FT Group	(11)	-	(11)
The Penguin Group	1	-	1
Continuing operations	(10)	-	(10)

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2d Share of operating profit of associates

	2004
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit
Business sectors
Pearson Education	1	-	1
FT Group	14	-	14
The Penguin Group	-	-	-
Continuing operations	15	-	15
Discontinued operations	2	-	2
	17	-	17
	2003
All figures in £ millions	Results from operations	Goodwill amortisation	Operating profit
Business sectors
Pearson Education	1	-	1
FT Group	14	(7)	7
The Penguin Group	-	-	-
Continuing operations	15	(7)	8
Discontinued operations	2	-	2
	17	(7)	10

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2e Analysis of capital employed

All figures in £ millions	Note	2004	2003 restated
Business sectors
Pearson Education		3,059	3,457
FT Group		198	256
The Penguin Group		593	591
Continuing operations		3,850	4,304
Discontinued operations		130	152
		3,980	4,456
Geographical location
United Kingdom		410	425
Continental Europe		58	62
North America		3,245	3,676
Asia Pacific		114	120
Rest of world		23	21
Continuing operations		3,850	4,304
Discontinued operations		130	152
		3,980	4,456
Reconciliation of capital employed to net assets
Capital employed		3,980	4,456
Add: deferred taxation	21	165	145
Less: provisions for liabilities and charges	22	(123)	(152)
Less: net debt excluding finance leases	27	(1,206)	(1,361)
Net assets		2,816	3,088

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