The Financial Times Group

The Financial Times Group is a network of some of the world's finest newspapers and a fast-growing web of online services. Built around the Financial Times newspaper - a unique voice on the key financial, economic and business issues of the day - we are the most international source of business news and analysis in the world.

The FT Group

saw revenues fall £75m (8%) as the global economic downturn continued to hit advertising revenues and, to a much lesser extent, newsstand sales. Despite the revenue decline, operating profits increased 8% to £80m due to double digit profit growth at IDC and Recoletos (the FT Group's two businesses least affected by the downturn), successful cost reduction programmes across the Group, and sharply lower internet losses of £34m (down from £60m in 2001).

The Financial Times newspaper and its internet partner, FT.com, are now fully integrated. A 14% reduction in their combined cost base mitigated - but could not offset - a sharp reduction in advertising revenues at the newspaper. A further advertising deterioration in the second half, together with some one-off costs, meant that, although the newspaper remained in profit for the full year, it operated at a loss in the second half. Industry conditions remained tough for the FT's major advertising categories, including financial services, technology and business-to-business. Advertising volumes fell by 24% (on top of a 29% fall in 2001) and advertising revenues by 23% (after a 20% decline in 2001). The newspaper ended the year with average daily circulation of 473,587, a decline of 6% on the previous year primarily due to lower sales in the UK.

FT.com broke even in the fourth quarter of 2002. Revenues were up 9% to £25m. Despite the introduction of paid-for elements of the site, FT.com's popularity continued to grow, up 30% to a record 3.5m unique monthly users in January 2003.

Les Echos made a profit of £7m (down 34% on 2001) as advertising revenues fell sharply. Average daily circulation was 121,000, a 6% decline, but well ahead of its market. FT Business delivered double digit margins as its major titles - Investors Chronicle, The Banker and Financial Adviser - all strengthened their market positions.

Losses from the FT's associates and joint ventures were less than half the level of the previous year due to continued progress at FT Deutschland, our joint venture with Gruner + Jahr. Despite the tough German advertising market, FT Deutschland grew its advertising revenues slightly and increased its circulation by 14% to 89,000 at the end of the year. The Economist Group also contributed to the improvement, offsetting falling advertising revenues with tight cost controls. The Economist's worldwide weekly circulation grew by 6% to 881,259.

Recoletos (Bolsa Madrid: REC), our Spanish media group, increased profits by 21%, benefiting from actions taken in 2001 to reduce costs. After a successful re-launch Marca, Spain's leading sports newspaper, grew its circulation by 2% to 382,000 and increased advertising revenues and profits. Circulation at business newspaper Expansion was 9% lower and advertising revenues 25% lower.

Interactive Data Corporation (NYSE: IDC), our 60%-owned asset pricing business, increased revenues by 7% as contract renewal rates in its institutional business - which accounts for 90% of revenues - continued to run at 95%. IDC also benefited from the launch of several new products and the integration of Merrill Lynch's Securities Pricing business, the latest in a series of successful bolt-on acquisitions. In January 2003, IDC announced the acquisition of S&P Comstock, which adds real-time pricing to IDC's existing end-of-day services.

*Les Echos and FT Business

**The FT Group?s internet enterprises include online businesses related to the FT, Les Echos,Recoletos, FT Deutschland, The Economist, IDC and CBSMarketwatch.

About the Financial Times Group

The Financial Times is the most international business newspaper in the world. It is printed in 20 cities across the globe with a daily circulation of over 470,000 and a readership of more than 1.6m people in 140 countries.

FT.com, the newspaper's internet partner, combines agenda-setting editorial and financial data with a broad range of business tools, including the most extensive business news search function on the internet. FT.com attracts 3.5m unique monthly visitors and has a growing subscriber base of 45,000.

Our pan-European network includes the leading business newspapers and websites in France (Les Echos and lesechos.fr) and Spain (Expansión and expansiondirecto.es). In 2000 we launched a new German language newspaper, FT Deutschland, a joint venture with Gruner + Jahr, which has built a circulation of 90,000 in just three years.

Our Interactive Data Corporation (NYSE: IDC) is a leading provider of financial data to institutional and retail investors. IDC collects, maintains and models data on more than 3.5m securities for its customers which include 49 of the world's top 50 financial institutions.

FT Business produces specialist information on the retail, personal and institutional finance industries including Investors Chronicle and the UK's premier finance magazine, The Banker.

The FT Group has a 50% stake in the Economist Group, which publishes the world's leading weekly business and current affairs journal.

The FT also has a stake in a number of joint ventures, including FTSE International, a joint venture with the London Stock Exchange; Vedomosti, Russia's leading business newspaper and a partnership venture with Dow Jones and Independent Media; and a 50% stake in BDFM, publishers of South Africa's leading financial newspapers and websites.