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Penguin Group Achieves Strong Sales and Profits in First Half of 2008

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July 24 – July 31, 2008 Edition

Penguin Group Achieves

Strong Sales and Profits

in First Half of 2008

NEW YORK and LONDON/7/28/08–Penguin Group reported a 9% increase in sales for the first half of the year, compared to 2007’s midpoint. Profits were up by 28%. The strong first half puts Penguin in a position to sustain its success and deliver double-digit profit margins for the full year.

In the U.S., Penguin Group (USA) had an outstanding performance in the first half. David Shanks, CEO, Penguin Group (USA), said, “Our impressive results reflect the company’s exceptionally strong publishing performance. Penguin Group (USA) is publishing extraordinary, award-winning books by some of the world’s most popular authors and we are dominating national bestseller lists as never before. We delivered seventeen #1 New York Times bestsellers, an industry best. Our mass market division achieved a record 46 New York Times bestsellers, up a record 92%. In hardcover, many of our imprints saw a rise in bestsellers and Putnam continued its reign as the leader of New York Times hardcover bestsellers. Our eBook sales were way up and we introduced a new program of Penguin Enhanced eBook Classics with the publication of Pride and Prejudice–which debuted out of the gate at #6 on Amazon’s Kindle chart. We have been aggressively converting our books into the eBook format and we expect to have 6,500 titles available in the eBook format by beginning of next year. Also, we saw real growth in our audio books business, with sales more than double those of last year at this time.

“Our US sales also got a big boost from a phenomenal string of trade paperback blockbusters such as Eckhart Tolle’s A New Earth, Greg Mortenson’s Three Cups of Tea and Khaled Hosseini’s The Kite Runner. Additionally, we won the 2008 Pulitzer Prize for Fiction with Riverhead Books’ publication of Junot Díaz’s The Brief Wondrous Life of Oscar Wao. We are anticipating a very solid second half, with bestsellers from authors such as Patricia Cornwell, Kathleen Norris, Clive Cussler, Daniel Silva, Barton Gellman and Mary–Kate Olsen and Ashley Olsen.”

Penguin Group’s global performance and outlook are strong. John Makinson, Chairman and CEO, Penguin Group, commented, “This has been a vintage six months, thanks to outstanding performances in every territory. The US company led the industry in #1 New York Times bestsellers; Penguin UK turned Devil May Care, the new James Bond novel by Sebastian Faulks, into the fastest-selling hardcover novel in its history; and we were named Publisher of the Year in both Australia and Canada on the same day. All this publishing success translated into an increase in underlying sales and an improvement in profits. We remain on track to achieve our target of a double-digit margin for the year as a whole.”

Here are highlights of Group (USA)

• Penguin Group USA leads the industry in #1 New York Times bestsellers, achieving 17 #1 bestsellers overall through June 2008, an industry best. The company has already matched

its 2007 full-year total of 17 #1 New York Times bestsellers.

• Achieved four or more #1 New York Times bestsellers simultaneously in nine of the first 24 weeks of 2008, also an industry best.

• Achieved #1 New York Times bestsellers every week of the year through June 2008, across ten different imprints.

• Is up 54% in overall New York Times bestsellers, with 134 titles hitting the bestseller lists.

Penguin Group (USA) Hardcover New York Times Bestsellers rose 44%, with Nearly 50% of All Putnam Titles Hitting The New York Times Bestseller List in the First Half

• Putnam, the industry leader in New York Times hardcover bestsellers for two decades, had nearly 50% of its first-half titles hit The New York Times list. Also

up over last year in terms of New York Times bestsellers were The Penguin Press (up 33%), Riverhead (up 33%), Viking (up 25%), Dutton (up 20%), and Gotham

(up 66%).

Penguin Group (USA) is the Industry Leader in Mass Market: It achieved Six #1 New York Times Mass Market Bestsellers, More Than

Any Other Publisher in That Category in the Industry

• Berkley/NAL has achieved six #1 New York Times mass market bestsellers, more than any other publisher in that category in the industry.

• Berkley/NAL has delivered 46 New York Times mass market bestsellers, an increase of 92% over last year, making it the industry leader in mass market.

Penguin Group (USA) Delivers Phenomenal Trade Paperback Performance

• Penguin Group (USA)’s trade paperback division was up 88% in overall New York Times bestsellers at the midyear point.

Audio Book Sales Rise in the U.S.more than doubled through June 2008, year on year, driven by strong consumer demand for A New Earth by Eckhart Tolle, as well as such bestselling audio titles as The Front by Patricia Cornwell, Phantom Prey by John Sandford, Plague Ship by Clive Cussler, and Me of Little Faith by Lewis Black.

The Penguin Group (USA) Young Readers Division continued to capitalize on the strength of its well-known brands and franchises.

In the U.S.Penguin Group (USA)’s net eBook sales from January through April 2008 surpassed the company’s eBook sales for all of 2007, and eBooks continue to sell strongly. Top-selling eBooks for Penguin Group (USA) in the first half of 2008 included: World Without End by Ken Follett, A New Earth by Eckhart Tolle, A Thousand Splendid Suns by Khaled Hosseini, The Pillars of the Earth by Ken Follett, Strangers in Death by J. D. Robb, and T is for Trespass by Sue Grafton.

Since the beginning of 2008, Penguin Group (USA) has strengthened eBooks and Online Initiatives, aggressively converting frontlist titles into the eBook format. Penguin Group (USA) currently has 3,500 titles in eBook format, plans to covert 2,000-plus backlist titles to the eBook format before the end of the year, and expects to have approximately 6,500 titles available in the eBook format by the beginning of 2009.

Penguin Group (USA) Online sales in the first half of 2008 increased 11percent over the same period in 2007.

The publisher also launched a first-of-its-kind prequel web movie series based on international New York Times–bestselling author Robin Cook’s new medical thriller, Foreign Body, to be published by Putnam, August 5, produced by Michael Eisner’s Internet production studio, Vuguru, launched in May. The 50- part webisode movie “prequel” to Foreign Body is available on youtube.com, hulu.com, and Penguin Group (USA)’s website as well as Penguin’s bookseller site. The web series runs five times per week for the 10 weeks leading to the August 5th publication date. The objective is to get potential readers “hooked” on the characters and the story, as a lead-up to publication of Robin Cook’s book by Putnam.

Penguin Group (www.penguin.com), one of the world’s largest English-language trade book publishers, has established divisions and key market positions in the United States, the United Kingdom, Australia, Canada, India, China, South Africa, New Zealand and Ireland. The Penguin Group is part of Pearson plc, the international media company.