IFRS Briefing

Pearson PLC
04 May 2005


4 May 2005

                             Pearson: IFRS briefing

Pearson is today publishing its financial statements for 2003 and 2004 under
International Financial Reporting Standards (IFRS).

For 2004, the primary changes to our reported results under IFRS are:

   • Reported operating profit increases from £231m to £404m and reported eps
    from 11.1p to 32.9p;


   • Adjusted operating profit decreases from £455m to £421m and adjusted eps
    from 30.0p to 27.3p;


   • Net assets increase from £2,816m to £3,014m.

IFRS has no effect on cash generation, and a negligible effect on our reported
cash flows.

Reported sales are lower because revenues earned by our discontinued business
Recoletos (2004 sales: £190m) are not reported under IFRS. We have also
deconsolidated a subsidiary, Maskew Miller Longman, which we report under IFRS
as a joint venture (2004 sales: £33m).

For 2005, we expect the IFRS effect to be broadly similar to 2004. Our
expectation of strong growth with further underlying progress on earnings, cash
and return on invested capital is therefore unchanged.

We are holding a conference call and webcast at 14.00 BST (09.00 EST) today with
Rona Fairhead, CFO; Robin Freestone, Deputy CFO; and Michael Day, Group
Treasurer. You can join this by calling [phone], passcode: 607291#
or at www.pearson.com/ifrs.


Financial highlights

£ millions                         2004        2004           2003        2003
--------------------------        -------     -------        -------     -------
                                  UK GAAP      IFRS          UK GAAP      IFRS
--------------------------        -------     -------        -------     -------

Sales                             3,919       3,696          4,048       3,850
--------------------------        -------     -------        -------     -------
Statutory results
--------------------------        -------     -------        -------     -------
Operating profit                    231         404            226         406
--------------------------        -------     -------        -------     -------
Profit before tax                   171         325            152         313
--------------------------        -------     -------        -------     -------
Basic earnings per share           11.1p       32.9p           6.9p       31.7p
--------------------------        -------     -------        -------     -------
Business performance
--------------------------        -------     -------        -------     -------
Adjusted operating profit           455         421            490         443
--------------------------        -------     -------        -------     -------
Adjusted profit before tax          386         345            410         353
--------------------------        -------     -------        -------     -------
Adjusted earnings                   239         217            254         217
--------------------------
Adjusted earnings per share        30.0p       27.3p          32.0p       27.3p

Free cash flow                      288         282            192         190
Net borrowings                    1,206       1,221          1,361       1,373
Return on invested capital          6.2%        6.1%           6.3%        6.0%
--------------------------        -------     -------        -------     -------


Summary consolidated balance sheet

£ millions                               2004      2004         2003      2003
--------------------------              -------   -------      -------   -------
                                       UK GAAP    IFRS         UK GAAP    IFRS
--------------------------             -------    -------      -------   -------
--------------------------             -------    -------      -------   -------
Goodwill and intangible assets          2,890     3,278        3,260     3,550
--------------------------              -------   -------      -------   -------
Other fixed assets                        538       878          553       929
--------------------------              -------   -------      -------   -------
Current assets                          2,558     2,064        2,523     2,257
--------------------------              -------   -------      -------   -------
Non-current assets held for sale            -       358            -         -
--------------------------              -------   -------      -------   -------
Total assets                            5,986     6,578        6,336     6,736
--------------------------              -------   -------      -------   -------
--------------------------              -------   -------      -------   -------
Equity and reserves                     2,816     3,014        3,088     3,161
--------------------------              -------   -------      -------   -------
Current liabilities                     1,275     1,080        1,704     1,593
--------------------------              -------   -------      -------   -------
Non-current liabilities                 1,895     2,403        1,544     1,982
--------------------------              -------   -------      -------   -------
Non-current liabilities held for sale       -        81            -         -
--------------------------              -------   -------      -------   -------
Total equity and liabilities            5,986     6,578        6,336     6,736
--------------------------              -------   -------      -------   -------
--------------------------              -------   -------      -------   -------

For more information:

Luke Swanson / Robin Freestone / Charlotte Elston + 44 (0) 20 7010 2310



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