: notes to the accounts :

2a. Analysis of sales and operating profit

Note : In 1999 ‘other items’ comprises exceptional items of £95m (1998: £120m) and Year 2000 compliance costs of £5m (1998: £7m).  • Exceptional items comprise integration costs following the acquisition of Simon & Schuster in 1998. These all relate to the Pearson Education business sector. The results of Simon & Schuster are included within the Pearson Education business sector and mainly within North America. • The results of internet enterprises, the Group’s discrete internet operations, are included within FT Group £36m and Pearson Education £3m. • Discontinued operations arising in 1999 relate to the withdrawl of the Group from the banking business following its disposal of Lazard on 3 March 2000. Discontinued operations arising in 1998 relate to the withdrawal of the Group from the consumer software business following its disposal of Mindscape Inc. in March 1998, the withdrawal of the Group from the consumer magazine business following its disposal of Pearson New Entertainment in April 1998 and the withdrawal of the Group from the visitor attractions business following its disposal of The Tussauds Group in October 1998. • Analyses of the profits of associates are shown in note 13.

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

2b. Analysis of capital employed