MAIN NEWS HEADLINES

December 15-31, 2005 Edition

Random House CEO

Touts ’05 Successes,

Sees Bright Future

NEW YORK, NY/12/13/05—Random House CEO Peter Olson issued his year-end employee letter December 13, touting the company’s lowest-ever overall return rate, 22 #1 New York Times bestsellers, and the all-time-bestselling Oprah Book Club selection among high points for the year.

Olson said the company is well positioned for fiscal year 2005 to exceed both sales and operating results for the previous year. Those results are due out in March 2006.

Olson reported that once again each of our North American publishing divisions will be profitable in 2005, with the Knopf Publishing Group, Random House Children’s Books, and Random House of Canada having banner years. All the company’s global territorial divisions will show a profit for this fiscal year, with the London-based Random House UK Group again posting record results that improve on the previous year’s.

He attributed the Random House successes to “the same core essentials that have proven indispensable to us year after year: our authors, and you who help publish them. This tandem, together with our booksellers, enabled us in 2005 to place more of our adult and children’s titles on the various New York Times national bestseller lists than any other publishing group­as we have done every year since we formed the company in the last decade.”

He said this teamwork has produced impressive sales numbers for us in North America this year for many books, among them:

More than six million copies in hardcover and paperback print of John Grisham’s #1 bestselling THE BROKER. Almost two million copies in print of ELDEST by Christopher Paolini, a #1 bestseller for Random House in the UK, Germany, and Australia, as well as in the U.S. and Canada. The three-million-plus-copy record-breaking Oprah Book Club selection in trade paperback for A MILLION LITTLE PIECES by James Frey. The history-making sell-through of our audio editions of J. K. Rowling’s HARRY POTTER AND THE HALF-BLOOD PRINCE, read by Jim Dale.

“Our surging strength in lifestyle and cooking titles­a category we had identified as vital for us to grow­is exemplified by the 1.2 million-copy FRENCH WOMEN DON’T GET FAT by Mireille Guiliano; the 600,000-copy EVERYDAY ITALIAN by Giada De Laurentiis; and Rachael Ray’s two #1 bestselling trade paperbacks,” he pointed out.

An additional 1.6 million copies of Dan Brown’s THE DA VINCI CODE, in its third year of publication, brings the total copies in print of the two hardcover editions to more than twelve million just in North America.

“While we hardly take as a given the customarily extensive critical accolades our books receive, the recognition of our titles by the editors of the New York Times Book Review on their list of the “Best Books of 2005” is amazing and humbling,” Olson said in his report.

“We published four of their five choices for Best Fiction­KAFKA ON THE SHORE by Haruki Murakami; PREP by Curtis Sittenfeld; SATURDAY by Ian McEwan; and VERONICA by Mary Gaitskill­and three of their five selections for Best Nonfiction­DE KOONING: An American Master by Mark Stevens and Annalyn Swan (also this year’s winner of both the Pulitzer Prize and the National Book Critics Circle award for Biography); THE LOST PAINTING by Jonathan Harr; and THE YEAR OF MAGICAL THINKING by Joan Didion (this year’s National Book Award winner for Nonfiction).

“Thirty-six of the Times Book Review’s “100 Notable Books of the Year” are Random House, Inc. titles, once again more than double those from any other publishing group. The Book Review’s Children’s Books editors selected FLUSH by Carl Hiaasen and TRACTION MAN IS HERE!, written and illustrated by Mini Grey, as two of their “Notable Books of 2005,” with the latter also chosen last month as one of the year’s ten “Best Children’s Illustrated Books.”

Olson also mentioned that in the coming year Random House will increase its outside client distribution business and expects to double the number of distribution clients over the next year. The company’s distribution billings already stand at $100 million, and are forecast to be a vital part of the company’s future profitability.

“Our 2006 new-title publishing is shaping up promisingly and I look forward to presenting you with some highlights in our forthcoming divisional meetings, “said Olson. “While the first Random House Films features are in the future, we do have a bumper crop of movie tie-ins in the year ahead, including the January national release of MEMOIRS OF A GEISHA by Arthur Golden; CARS, the summer release from Pixar, the creators of Toy Story and The Incredibles; THE DEVIL WEARS PRADA, starring Meryl Streep; Peter Mayle’s A GOOD YEAR, starring Russell Crowe; FLAGS OF OUR FATHERS, directed by Clint Eastwood; ERAGON, based on the first volume in the trilogy by Christopher Paolini; and, of course, THE DA VINCI CODE, starring Tom Hanks and directed by Ron Howard, opening on May 19.

“Our 2005 success is certainly a tribute to our books, their authors, and our publishing and sales and distribution excellence.. .“ Olson concluded.