McGraw-Hill Ryerson Limited

Page 1

McG

raw

-Hil

l R

yers

on L

imit

ed

Ann

ual

Rep

ort

1999

EE

PIN

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to y

ou b

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loba

l Rep

orts

Page 2

Tab

le o

f C

onte

nts

2C

OR

PO

RA

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PR

OF

ILE

Who

and

Wha

t M

cGra

w-H

ill R

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on L

imit

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4M

CG

RA

W-H

ILL

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SON

AT

AG

LA

NC

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A q

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look

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raw

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busi

ness

seg

men

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incl

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rim

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prog

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INA

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finan

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SHA

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A le

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to

McG

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Rye

rson

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areh

olde

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rom

H. I

an M

acdo

nald

, Cha

irm

an,

and

John

D. D

ill, P

resi

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and

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xecu

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Offi

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rev

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loba

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Page 3

2

McG

raw

-Hill

R

yers

on

Lim

ited

ha

s a

long

an

d ill

ustr

ious

hist

ory.

It

is b

uilt

on

the

solid

fou

ndat

ions

of

two

resp

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dpu

blis

hing

com

pani

es —

the

McG

raw

-Hill

Boo

k C

ompa

ny,

curr

entl

ykn

own

as T

he M

cGra

w-H

ill C

ompa

nies

, Inc

., an

d T

he R

yers

on P

ress

.M

cGra

w-H

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on p

ublis

hes

and

dist

ribu

tes

educ

atio

nal

and

prof

essi

onal

pro

duct

s in

bot

h pr

int a

nd n

on-p

rint

med

ia. T

hese

pro

d-uc

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to f

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e in

divi

dual

nee

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stom

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by p

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vidi

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and

inno

vati

ve e

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al a

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earn

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solu

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incl

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text

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sup

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McG

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Rye

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is

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ind

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in c

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with

var

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div

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natio

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idia

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itysh

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olde

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cGra

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McG

raw

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Com

pani

es, I

nc.

McG

raw

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Rye

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pub

lishe

s an

d di

stri

bute

s un

der

the

follo

w-

ing

high

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espe

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and

wel

l-re

cogn

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impr

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:

Cor

pora

te P

rofi

le Irwin/M

cGraw-H

illMcG

raw-H

ill

Am

acom

New

Yor

k, N

ew Y

ork

McG

raw

-Hill

New

Yor

k, N

ew Y

ork

Lear

ning

Tri

angl

e Pr

ess

New

Yor

k, N

ew Y

ork

Scha

um’s

New

Yor

k, N

ew Y

ork

Tab

New

Yor

k, N

ew Y

ork

W.I.

Pub

licat

ions

San

Die

go, C

alifo

rnia

Busi

ness

Wee

k Bo

oks

New

Yor

k, N

ew Y

ork

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anag

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anci

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raw

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trea

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in/M

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nois

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Osb

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Rock

port

, Mas

sach

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McG

raw

-Hill

Rye

rson

Lim

ited

Whi

tby,

Ont

ario

McG

raw

-Hill

Life

time

Lear

ning

Lexi

ngto

n, M

assa

chus

etts

McG

raw

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Rye

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assa

chus

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Bro

ught

to y

ou b

y G

loba

l Rep

orts

Page 4

3

To b

e re

cogn

ized

as

the

lead

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Can

adia

n pu

blis

her

of e

duca

tion

al r

esou

rces

and

info

rmat

ion

prod

ucts

and

ser

vice

s fo

r lif

elon

g le

arni

ng a

nd e

njoy

men

t.

To b

e th

e C

anad

ian

lead

er in

dev

elop

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and

mar

keti

ng q

ualit

y in

form

atio

n pr

oduc

ts a

nd s

ervi

ces

to s

elec

ted

educ

atio

nal,

prof

essi

onal

, an

d co

nsum

er m

arke

ts t

hrou

gh i

nnov

atio

n an

d te

amw

ork.

W

e w

ill p

rovi

de e

xcep

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alue

to

cust

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owth

and

rec

ogni

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mpl

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s, a

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utst

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inan

cial

per

form

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to

our

shar

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ders

.

At

McG

raw

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Rye

rson

, we

will

wor

k to

geth

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o:•

stri

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com

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obj

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mm

unic

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McG

raw

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Rye

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Cul

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loba

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Page 5

Tra

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cGra

w-H

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itle

s.

Ch

enel

ière

/M

cGra

w-H

ill

Bro

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to y

ou b

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loba

l Rep

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Page 6

5

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2

1,28

7

44

2,09

4

3,00

9

7,81

1

9,35

7

10,4

67

1999

1998

1997

1996

1995

1994

1999

1998

1997

1996

1995

1994

3%3%

8%

9%

0%

9%

4%4%

7%

8%

0%

8%

Bro

ught

to y

ou b

y G

loba

l Rep

orts

Page 7

Sinc

e 19

95, r

even

ues

have

dou

bled

and

earn

ings

hav

e gr

own

by 2

60.6

%.

We

are

aler

t to

the

need

s of

our

cu

stom

ers

in e

very

resp

ect.

6Mes

sage

to

the

Shar

ehol

ders

Fis

cal 1

999

was

ano

ther

out

stan

ding

yea

r fo

r ou

r C

ompa

ny in

man

y re

spec

ts.

Des

pite

sev

eral

yea

rs o

f un

cert

aint

y an

d cu

t-

back

s in

the

pub

lic s

ecto

r, M

cGra

w-H

ill R

yers

on L

imit

ed p

rodu

ced

its

thir

d co

nsec

utiv

e ye

ar o

f re

cord

rev

enue

s an

d ea

rnin

gs a

nd c

onti

nued

to im

prov

e ou

r pl

ace

in o

ur r

espe

ctiv

e va

riou

s m

arke

ts. T

otal

rev

enue

s

and

earn

ings

in

1999

gre

w b

y 13

.2%

and

12.

3% r

espe

ctiv

ely

over

1998

. Sin

ce 1

995,

rev

enue

s ha

ve d

oubl

ed a

nd e

arni

ngs

have

gro

wn

by

260.

6%.

As

we

head

int

o th

e ne

w m

illen

nium

, th

ere

is a

ren

ewed

sen

se o

f

urge

ncy

in b

oth

the

publ

ic a

nd p

riva

te s

ecto

rs t

o m

aint

ain

the

unpa

r-

alle

led

qu

alit

y of

C

anad

ian

ed

uca

tion

an

d

cult

ura

l in

du

stri

es.

Spen

ding

in

educ

atio

nal

sect

ors

of t

he e

cono

my

is o

nce

agai

n on

the

rise

, an

d th

e nu

mbe

r of

stu

dent

s em

bark

ing

on a

pos

t-se

cond

ary

educ

atio

n is

for

ecas

t to

gro

w b

y ap

prox

imat

ely

5% o

ver

the

next

fiv

e

year

s.

Und

oubt

edly

the

prim

ary

driv

er o

f the

Com

pany

’s su

cces

s ov

er th

e la

st

seve

ral

year

s ha

s be

en

our

cons

iste

nt

focu

s on

tr

ansf

orm

ing

the

Com

pany

int

o a

mar

ket-

driv

en e

ntit

y. W

e ar

e al

ert

to t

he n

eeds

of

our

cust

omer

s in

eve

ry r

espe

ct a

nd,

acco

rdin

gly,

the

qua

lity

of o

ur

prod

ucts

and

ser

vice

s co

ntin

ues

to g

row

. Evi

denc

e of

thi

s is

bor

ne o

ut

by s

igni

fican

t gr

owth

in a

ll ou

r m

arke

ts.

We

have

est

ablis

hed

stro

ng w

orki

ng r

elat

ions

hips

thr

ough

out

The

McG

raw

-Hill

Com

pani

es,

Inc.

, pr

ovid

ing

us w

ith

acce

ss t

o an

ext

en-

sive

arr

ay o

f re

sour

ces

and

expe

rtis

e. T

he e

ffect

ive

leve

rage

of

thes

e

reso

urce

s an

d ex

pert

ise,

co

uple

d w

ith

the

vast

ca

pabi

litie

s an

d

crea

tivi

ty o

f ev

ery

mem

ber

of M

cGra

w-H

ill R

yers

on,

is a

cor

ners

tone

of o

ur s

ucce

ss.

Our

str

engt

h an

d su

cces

s in

the

mar

ketp

lace

is

a te

stim

ony

to t

he

qual

ity

of o

ur i

ntel

lect

ual

prop

erty

. It

is

appr

opri

ate

to r

ecog

nize

the

incr

edib

le c

ontr

ibut

ion

of o

ur a

utho

rs, w

ho r

ank

amon

g th

e br

ight

est

and

mos

t hi

ghly

rec

ogni

zed

of C

anad

ian

educ

ator

s an

d ac

adem

ics.

In

John

D. D

ill,

Pres

iden

t an

d C

hief

Exe

cuti

ve O

ffic

er, a

nd H

. Ian

Mac

dona

ld,

Cha

irm

an o

f th

e B

oard

.

Bro

ught

to y

ou b

y G

loba

l Rep

orts

Page 8

7

addi

tion

, w

e w

ould

lik

e to

tha

nk o

ur c

usto

mer

s, t

each

ers,

rev

iew

ers,

and

stud

ents

for

the

ir s

ugge

stio

ns o

n ho

w t

o co

nsta

ntly

im

prov

e

our

prod

ucts

.

The

dig

ital

eco

nom

y ha

s pr

esen

ted

trem

endo

us o

ppor

tuni

ties

and

chal

leng

es t

o M

cGra

w-H

ill R

yers

on.

The

vas

t m

ajor

ity

of o

ur e

duca

-

tion

al p

rodu

cts

now

enc

ompa

ss d

igit

al c

ompo

nent

s, a

nd t

he s

ervi

ce

area

s of

the

bus

ines

s ha

ve b

een

rele

ntle

ss in

em

brac

ing

new

tec

hnol

o-

gies

to

impr

ove

the

cust

omer

exp

erie

nce.

The

Com

pany

see

s e-

busi

-

ness

as

a m

eans

to

expa

nd t

he s

ize

of o

ur c

usto

mer

bas

e, in

crea

se t

he

form

ats

in w

hich

our

pro

duct

s ar

e pr

esen

ted,

and

enh

ance

our

lev

els

of s

ervi

ce a

nd e

ffici

ency

.

The

sus

tain

ed s

tren

gth

of t

he C

anad

ian

econ

omy

is a

n in

dica

tor

of

even

mor

e po

siti

ve t

imes

to

com

e. E

ncou

ragi

ng g

row

th r

ates

, re

duc-

tion

in u

nem

ploy

men

t, a

nd a

n in

crea

se in

the

over

all s

ize

of th

e la

bour

mar

ket

all b

ode

wel

l for

the

fut

ure.

In c

losi

ng,

we

wou

ld l

ike

to c

omm

end

each

and

eve

ry m

embe

r of

McG

raw

-Hill

Rye

rson

for

hav

ing

wor

ked

tire

less

ly t

o tr

ansf

orm

the

Com

pany

int

o a

mar

ket

lead

er a

nd f

or h

avin

g em

brac

ed c

hang

e

du

rin

g ch

alle

ngi

ng

tim

es.

Th

ese

qual

itie

s h

ave

pos

itio

ned

th

e

Com

pany

adm

irab

ly t

o fa

ce t

he f

utur

e.

H. I

an M

acdo

nald

, O.C

., LL

.D.,

D.U

NIV

., D

.LIT

T.

Cha

irm

an o

f th

e Bo

ard

of D

irec

tors

John

D. D

ill

Pres

iden

t an

d C

hief

Exe

cuti

ve O

ffice

r

CO

RP

OR

AT

EG

OV

ER

NA

NC

E

A p

rim

ary

conc

ern

of t

he C

orpo

ratio

n’s

Boar

d of

Dir

ecto

rs h

as b

een,

and

will

con

tinue

to

be, t

he e

ffect

ive

gove

rnan

ce

of M

cGra

w-H

ill R

yers

on L

imite

d on

beh

alf

of s

hare

hold

ers.

The

Cor

pora

tion’

s C

orpo

rate

Gov

erna

nce

Com

mitt

ee

mee

ts r

egul

arly

to

revi

ew c

orpo

rate

gov

erna

nce

mat

ters

. A

rev

iew

of

the

Cor

pora

tion’

s go

vern

ance

pol

icie

s be

gins

on

page

8 o

f th

e M

anag

emen

t In

form

atio

n C

ircu

lar

that

acc

ompa

nies

thi

s A

nnua

l Rep

ort.

Bro

ught

to y

ou b

y G

loba

l Rep

orts

Page 9

LE

AD

ING

TE

CH

NO

LO

GY

SOL

UT

ION

S

Med

ia t

echn

olog

y is

cen

tral

to

the

Div

isio

n’s

prod

uct

deve

lopm

ent,

sale

s, a

nd m

arke

ting

str

ateg

ies.

In

1999

, th

e m

arke

t se

emed

mor

ere

ady

than

eve

r be

fore

to

adop

t co

urse

-man

agem

ent

tech

nolo

gies

and

cons

ider

alt

erna

tive

del

iver

y m

odes

for

lea

rnin

g m

ater

ial.

Page

Out

,H

ighe

r E

duca

tion

’s ow

n co

urse

Web

sit

e an

d co

urse

-man

agem

ent

prod

uct,

now

has

ove

r 1,

000

Can

adia

n re

gist

ered

use

rs. B

y m

id-1

999,

all

Can

adia

n ti

tles

wer

e ac

com

pani

ed b

y a

text

Web

sit

e an

d al

l ke

yti

tles

incl

uded

an

Onl

ine

Lear

ning

Cen

tre.

In a

ddit

ion

to le

vera

ging

tech

nolo

gy in

the

prod

uct d

evel

opm

ent a

rea,

the

Div

isio

n is

als

o in

vest

ing

in t

echn

olog

ies

that

will

hel

p to

impr

ove

its

busi

ness

pro

cess

es a

nd e

nhan

ce c

usto

mer

rel

atio

nshi

p m

anag

e-m

ent.

A n

umbe

r of

init

iati

ves

wer

e la

unch

ed in

199

9, in

clud

ing

a ne

wst

ate

of t

he a

rt s

ales

for

ce a

utom

atio

n an

d sa

mpl

ing

syst

em p

lus

OSC

AR

, the

boo

ksel

ler’s

Web

-bas

ed o

rder

sta

tus

inqu

iry

syst

em.

CA

NA

DIA

NP

UB

LIS

HIN

GP

RO

GR

AM

Tho

ugh

sale

s gr

owth

ove

rall

was

str

ong,

199

9 re

pres

ente

d a

year

of

both

suc

cess

es a

nd d

isap

poin

tmen

ts f

or t

he C

anad

ian

publ

ishi

ngpr

ogra

m. M

arke

ting

, man

agem

ent,

fin

ance

, and

the

so

ftsi

de li

sts

per-

form

ed

extr

emel

y w

ell;

how

ever

, th

e ac

coun

ting

an

d ec

onom

ics

prog

ram

s bo

th l

ost

mar

ket

shar

e w

ith

the

intr

oduc

tion

of

new

com

-pe

tito

rs in

the

mar

ketp

lace

. The

Hig

her

Edu

cati

on D

ivis

ion

had

stro

ng

perf

orm

ance

fro

m i

ts f

irst

edi

tion

s th

is y

ear,

inc

ludi

ng I

nter

med

iate

Acc

ount

ing

by B

eech

y/C

onro

d, w

hich

tri

pled

its

sal

es f

orec

ast,

and

Psyc

holo

gyby

W

ortm

an/L

oftu

s/W

eave

r/A

tkin

son,

w

hich

ac

hiev

ed12

4% o

f its

goa

l. In

add

itio

n, m

any

of th

e re

visi

ons

also

exc

eede

d sa

les

goal

s, in

clud

ing

Shap

iro’

s M

arke

ting

(119

%)

and

Ros

s’ F

unda

men

tals

of

Cor

pora

te F

inan

ce(1

42%

).

Seve

ral

mem

bers

of

the

Div

isio

n’s

edit

oria

l te

am w

ere

reco

gniz

ed b

yth

e In

tern

atio

nal

Publ

ishi

ng G

roup

of

The

McG

raw

-Hill

Com

pani

es,

Inc.

and

rec

eive

d a

num

ber

of a

war

ds,

incl

udin

g In

tern

atio

nal

Edi

tor

of t

he Y

ear,

Bes

t Lo

cal P

rodu

ct, a

nd B

est

Rev

isio

n.

Sign

ings

ove

rall

exce

eded

the

Div

isio

n’s

goal

in

1999

. T

hey

incl

uded

seve

ral

first

edi

tion

s, a

n in

dica

tion

of

McG

raw

-Hill

Rye

rson

’s co

ntin

-ue

d co

mm

itm

ent

to g

row

the

Can

adia

n pu

blis

hing

pro

gram

.

BU

SIN

ESS

UN

CE

RT

AIN

TIE

S

The

int

rodu

ctio

n of

onl

ine

text

book

ret

aile

rs h

as t

he p

oten

tial

to

crea

te u

ncer

tain

ty r

egar

ding

app

ropr

iate

inve

ntor

y le

vels

, ret

urns

fore

-ca

sts,

and

app

ropr

iate

sal

es r

ecog

niti

on. T

he D

ivis

ion

will

be

mon

itor

-in

g an

d w

orki

ng c

lose

ly w

ith

thes

e or

gani

zati

ons

to a

ccur

atel

y ca

ptur

esa

les

and

cust

omer

inf

orm

atio

n as

wel

l as

int

erpr

et t

he p

oten

tial

impa

ct o

n in

vent

ory

and

retu

rns

rate

s.

Hig

her

Edu

cati

on D

ivis

ion

SAL

ES

GR

OW

TH

In

1999

, th

e M

cGra

w-H

ill R

yers

on H

ighe

r Ed

ucat

ion

Div

isio

n co

ntin

ued

to g

ener

ate

mom

entu

m a

nd d

istin

guis

h its

elf

as a

for

mid

able

pla

yer

with

in t

he H

ighe

r Ed

ucat

ion

mar

ket

segm

ent

(bas

ed o

n C

anad

ian

Publ

ishe

rs C

ounc

il 19

99 y

ear-

end

stat

istic

s). O

vera

ll th

e D

ivis

ion

achi

eved

a

6% s

ales

incr

ease

ove

r pr

ior

year

and

incr

ease

d m

arke

t sha

re (

base

d on

Can

adia

n Pu

blis

hers

Cou

ncil

1999

yea

r-en

d st

atis

tics)

. Sal

es o

f im

port

ed p

rodu

ct

exce

eded

pla

n by

17%

and

sal

es o

f Can

adia

n pr

oduc

t ach

ieve

d an

incr

ease

of 9

% o

ver

the

prio

r ye

ar. T

he H

ighe

r Ed

ucat

ion

Div

isio

n be

lieve

s its

effo

rts

to

stre

ngth

en i

ts s

ales

, m

arke

ting,

and

edi

tori

al t

eam

s co

mbi

ned

with

its

effe

ctiv

e m

edia

tec

hnol

ogy

prog

ram

s, a

nd t

he e

stab

lishm

ent

of a

num

ber

of k

ey

allia

nces

and

ser

vice

initi

ativ

es c

ontr

ibut

ed to

its

succ

ess.

Ser

vice

exc

elle

nce

is a

key

par

t of t

he D

ivis

ion’

s ov

eral

l str

ateg

y. T

his

year

, the

Hig

her

Educ

atio

n

Div

isio

n’s

mis

sion

to

prov

ide

the

best

ser

vice

in

the

indu

stry

was

rec

ogni

zed

by C

anad

ian

book

selle

rs.

In f

all

1999

, M

cGra

w-H

ill R

yers

on w

as t

he

reci

pien

t of

the

Wes

tern

Col

lege

Sto

res

Ass

ocia

tion

Serv

ice

Exce

llenc

e Aw

ard—

the

first

tim

e an

edu

catio

nal p

ublis

her

has

won

thi

s aw

ard

in m

any

year

s.

The

Div

isio

n is

al

so in

vest

ing

inte

chno

logi

es th

at w

illhe

lp to

impr

ove

itsbu

sine

ss p

roce

sses

.

Sign

ings

ove

rall

exce

eded

the

Div

isio

n’s g

oal i

n19

99.

8B

roug

ht to

you

by

Glo

bal R

epor

ts

Page 10

9

OU

TL

OO

KT

he H

ighe

r Ed

ucat

ion

Div

isio

n ex

pect

s en

rolm

ent g

row

th in

som

e pr

ovin

ces

and

an

incr

easi

ng

dem

and

for

cour

se-

man

agem

ent

appl

icat

ions

an

d di

gita

l co

nten

t in

20

00.

Con

tinue

d pr

ogre

ss i

s al

so e

xpec

ted

in t

he d

evel

opm

ent

ofth

e in

dust

ry’s

e-co

mm

erce

dis

trib

utio

n ch

anne

l by

both

new

reta

ilers

and

trad

ition

al b

ooks

elle

rs. T

he D

ivis

ion

belie

ves e

-m

arke

ting

will

bec

ome

mor

e pr

eval

ent.

As

a re

sult,

the

Div

isio

n is

sig

nific

antly

incr

easi

ng it

s in

vest

men

t in

tech

nol-

ogy

and

e-m

arke

ting

and

e-co

mm

erce

ski

lls fo

r 20

00.

Mov

ing

into

20

00,

the

Div

isio

n an

tici

pate

s al

lC

anad

ian

book

titl

es w

ill a

lso

be a

vaila

ble

in W

ebC

T d

ig-

ital

form

at.

The

Div

isio

n al

so a

ntic

ipat

es t

hat

sele

cted

title

s w

ill b

e av

aila

ble

in o

ther

dig

ital

form

ats,

inc

ludi

ngBl

ackb

oard

. In

add

ition

, th

e D

ivis

ion

has

seve

ral

e-bo

oks

unde

r de

velo

pmen

t and

has

laid

the

foun

datio

n fo

r la

unch

-in

g its

e-c

omm

erce

cap

abili

ties

and

stra

tegy

in e

arly

200

0.T

he D

ivis

ion’

s m

ediu

m-t

erm

goa

ls a

re t

o gr

ow a

t a

fast

er r

ate

than

the

indu

stry

and

to

stri

ve t

o be

rec

ogni

zed

as th

e be

st h

ighe

r ed

ucat

ion

wor

k en

viro

nmen

t in

the

indu

s-tr

y, p

artic

ular

ly f

or h

ard-

wor

king

, te

chno

logi

cally

-sav

vy,

and

crea

tive

indi

vidu

als

look

ing

to g

row

pro

fess

iona

lly.

The

be

st-s

ellin

g ti

tles

fo

r th

e H

ighe

r E

duca

tion

Div

isio

n in

199

9 w

ere

as fo

llow

s:

1.M

cSha

ne,C

anad

ian

Org

aniz

atio

nal B

ehav

iour

,T

hird

Edi

tion

2.R

oss/

Wes

terf

ield

/Jor

dan/

Rob

erts

, Fun

dam

enta

ls o

fC

orpo

rate

Fin

ance

,Thi

rd C

anad

ian

Editi

on

3.La

rson

/Wild

/Chi

appe

tta/

Nel

son/

Car

roll/

Zin

,Fu

ndam

enta

l Acc

ount

ing

Prin

cipl

es, V

olum

e 1,

Nin

th C

anad

ian

Editi

on

4.Sh

apir

o/Pe

rrea

ult/

McC

arth

y, B

asic

Mar

keti

ng: A

Glo

bal M

anag

eria

l App

roac

h,N

inth

Can

adia

nEd

ition

5.G

arri

son/

Nor

een/

Che

sley

/Car

roll,

Man

ager

ial

Acc

ount

ing:

Con

cept

s fo

r Pl

anni

ng, C

ontr

ol,

Dec

isio

n M

akin

g, F

ourt

h C

anad

ian

Editi

on

6.Sc

hwin

d/D

as/W

agar

, Can

adia

n H

uman

Res

ourc

eM

anag

emen

t,Fi

fth E

ditio

n

Bro

ught

to y

ou b

y G

loba

l Rep

orts

Page 11

LE

AD

ING

ED

UC

AT

ION

AL

SOL

UT

ION

S

The

Sch

ool

Div

isio

n co

ntin

ued

to i

nves

t in

mar

ket

rese

arch

dur

ing

1999

; th

is

incl

uded

fo

cus

grou

ps,

quan

tita

tive

su

rvey

s,

advi

sory

boar

ds,

and

inte

rvie

ws.

Res

earc

h re

sult

s ha

ve s

igni

fican

tly

influ

ence

dth

e D

ivis

ion’

s pu

blis

hing

pro

gram

and

sal

es/m

arke

ting

str

ateg

ies

for

1999

an

d

2000

. T

he

1999

ob

ject

ive

to

wor

k cl

osel

y w

ith

Che

neliè

re/M

cGra

w-H

ill t

o co

ncur

rent

ly p

ublis

h pr

oduc

ts i

n bo

thE

nglis

h an

d Fr

ench

w

as

real

ized

w

ith

the

publ

icat

ion

of O

MN

I-SC

IEN

CES

7–9

as w

ell

as O

MN

IMAT

HS

9. T

he C

ompa

ny’s

ongo

ing

abili

ty t

o pr

esen

t pr

oduc

ts i

n bo

th o

ffici

al l

angu

ages

is

proj

ecte

d to

crea

te a

dis

tinc

tive

long

-ter

m c

ompe

titi

ve a

dvan

tage

. The

Div

isio

n w

illco

ntin

ue t

o im

plem

ent

this

str

ateg

y in

200

0 w

ith

the

conc

urre

nt p

ub-

licat

ion

of f

ive

addi

tion

al t

itle

s.

BU

SIN

ESS

UN

CE

RT

AIN

TIE

SW

hile

fun

ding

rem

ains

sta

ble

in W

este

rn a

nd A

tlan

tic

Can

ada,

cur

-ri

culu

m i

mpl

emen

tati

on t

imel

ines

— p

arti

cula

rly

for

grad

es 7

–10

scie

nce

in A

tlan

tic

Can

ada

— a

re i

n a

stat

e of

flu

x. I

n 19

99,

the

Ont

ario

Min

istr

y of

Edu

cati

on a

nd T

rain

ing

anno

unce

d a

$30

mill

ion

inve

stm

ent

in t

extb

ooks

to

supp

ort

impl

emen

tati

on o

f th

e ne

w G

rade

10 c

urri

culu

m i

n th

e 20

00–2

001

scho

ol y

ear.

Whi

le t

his

fund

ing

stab

ility

pre

sent

s tr

emen

dous

opp

ortu

nity

, sp

endi

ng a

lloca

tion

acr

oss

seve

n co

urse

s in

five

diff

eren

t su

bjec

t ar

eas

repr

esen

ts t

he m

ost

sign

if-ic

ant

vari

able

. T

he S

choo

l D

ivis

ion

is p

oise

d to

com

pete

wit

h ne

wC

anad

ian

titl

es in

fiv

e of

the

sev

en c

ours

es.

CA

NA

DIA

NP

UB

LIS

HIN

GP

RO

GR

AM

In 2

000,

the

Sch

ool

Div

isio

n is

ent

erin

g th

e gr

ades

7 a

nd 8

his

tory

mar

ket

for

the

first

tim

e w

ith

Can

ada:

The

Sto

ry o

f Our

Her

itage

(Gra

de7)

and

Can

ada:

The

Sto

ry o

f a D

evel

opin

g N

atio

n (G

rade

8),

pu

blis

hed

for

Ont

ario

’s ne

w e

lem

enta

ry c

urri

culu

m.

The

Div

isio

n w

ill c

onti

nue

to b

uild

on

the

stre

ngth

of i

ts h

igh

scho

ol s

cien

ce a

nd m

athe

mat

ics

list

wit

h th

e pu

blic

atio

n of

SC

IEN

CEP

OW

ER™

10,

Ont

ario

E

diti

on;

MAT

HPO

WER

™12

, W

este

rn E

diti

on;

MAT

HPO

WER

™10

, O

ntar

ioE

diti

on; a

nd M

athe

mat

ics:

App

lyin

g th

e C

once

pts

10. T

he D

ivis

ion’

s hi

s-to

rica

lly s

tron

g so

cial

stu

dies

and

his

tory

lis

t w

ill b

e re

vita

lized

wit

hth

e pu

blic

atio

n of

Can

ada:

A N

atio

n U

nfol

ding

, Ont

ario

Edi

tion

; Civ

ics:

Part

icip

atin

g in

a D

emoc

ratic

Soc

iety

; and

Hor

izon

s 20

00+:

Car

eer

Stud

ies,

Ont

ario

Edi

tion

. Mar

ket r

esea

rch

and

edit

oria

l wor

k in

200

0 w

ill fo

cus

on d

evel

opin

g re

sour

ces

for

seni

or h

igh

scho

ol s

cien

ce,

mat

hem

atic

s,an

d so

cial

stu

dies

/his

tory

to

prep

are

for

Ont

ario

cur

ricu

lum

im

ple-

men

tati

on in

200

1–20

03.

Sch

ool

Div

sion

SAL

ES

GR

OW

TH

The

Sch

ool D

ivis

ion

enjo

yed

anot

her

succ

essf

ul y

ear

in 1

999

larg

ely

beca

use

of th

e $3

0 m

illio

n in

vest

men

t in

text

book

s by

the

Ont

ario

Min

istr

y of

Educ

atio

n an

d Tr

aini

ng to

sup

port

the

impl

emen

tatio

n of

new

Gra

de 9

cur

ricu

lum

in S

cien

ce, M

athe

mat

ics,

Lan

guag

e A

rts,

and

Geo

grap

hy. T

he

Scho

ol D

ivis

ion

capt

ured

app

roxi

mat

ely

60%

of

the

Gra

de 9

sci

ence

mar

ket

with

SC

IEN

CE

POW

ER

™ 9

. T

he D

ivis

ion’

s su

cces

s w

as n

ot l

imite

d to

the

Ont

ario

mar

ket.

MAT

HPO

WE

R™

11,

Wes

tern

Edi

tion,

was

ado

pted

by

55%

of t

he A

lber

ta m

arke

t, a

mar

ket s

hare

that

was

pre

viou

sly

held

by

one

othe

r

Scho

ol p

ublis

her.

The

Ope

n C

ourt

pro

duct

s co

ntin

ued

to b

enef

it fr

om a

n on

goin

g fo

cus

on e

arly

lite

racy

res

ultin

g in

a 5

7% in

crea

se in

sal

es. T

he G

lenc

oe

and

Scie

nce

Res

earc

h A

ssoc

iate

s (S

RA

) lin

es a

lso

cont

inue

d to

per

form

str

ongl

y an

d ha

ve e

ffect

ivel

y di

vers

ified

the

Div

isio

n’s

prod

uct

offe

ring

s.

The

Sch

ool D

ivis

ion

is p

oise

d to

com

pete

with

new

Can

adia

ntit

les

in fi

ve o

f the

seve

n ne

w G

rade

10

cour

ses

in O

ntar

io.

The

Div

isio

n w

illco

ntin

ue to

bui

ld o

nth

e st

reng

th o

f its

high

sch

ool s

cien

cean

d m

athe

mat

ics

list.

10B

roug

ht to

you

by

Glo

bal R

epor

ts

Page 12

OU

TL

OO

KEn

rolm

ent

in t

he s

choo

l m

arke

t is

exp

ecte

d to

rem

ain

stab

le in

200

0. T

he S

choo

l Div

isio

n ex

pect

s to

mai

ntai

n its

reve

nue

grow

th t

hrou

gh t

he c

ompl

etio

n of

SC

IEN

CE

-PO

WE

R™

7–

10,

Ont

ario

Ed

ition

, M

ATH

POW

ER

™10

–12,

W

este

rn

Edi

tion

, M

AT

HPO

WE

R™

9–

10,

Ont

ario

Edi

tion,

and

the

laun

ch o

f fiv

e ne

w s

ocia

l stu

dies

/hi

stor

y tit

les.

The

bes

t-se

lling

titl

es i

n th

e Sc

hool

Div

isio

n fo

r 19

99w

ere

as fo

llow

s:

1.W

olfe

/Cla

ncy/

Jasp

er/L

inde

nber

g/Ly

nn/M

usto

e/Sm

ythe

,SC

IEN

CE

POW

ER

™ 9

2.K

nill/

Baxt

er/D

otto

ri/F

awce

tt/F

ores

t/H

amilt

on/P

asko

/Tr

aini

/Web

b, M

ATH

POW

ER

™ 9

, Ont

ario

Edi

tion,

Seco

nd E

ditio

n

3.K

nill/

Abl

ett/

Ballh

eim

/Car

ter/

Col

lins/

Con

rad/

Don

nelly

/Ham

ilton

/Mill

er/S

arna

/War

drop

, M

ATH

POW

ER

™ 1

1, W

este

rn E

ditio

n

4.C

lanc

y/Ed

war

ds/G

race

/Bro

wn/

Jolli

ffe,

SCIE

NC

EPO

WE

R™

8

5.K

nill/

Abl

ett/

Ballh

eim

/Car

ter/

Col

lins/

Con

rad/

Don

nelly

/Ham

ilton

/Mill

er/S

arna

/War

drop

, M

ATH

POW

ER

™ 1

0, W

este

rn E

ditio

n

6.G

albr

aith

/Gue

/Bul

lard

/Bul

lard

/Cla

ncy/

Kid

dell,

SC

IEN

CE

POW

ER

™ 7

11B

roug

ht to

you

by

Glo

bal R

epor

ts

Page 13

PR

OD

UC

TD

EV

EL

OP

ME

NT

The

Div

isio

n ha

s in

vest

ed in

onl

ine

mar

ket

rese

arch

tha

t w

ill b

e co

m-

plet

ed b

y th

e en

d of

the

fir

st q

uart

er 2

000.

Thi

s w

ill a

llow

the

cus

-to

miz

atio

n of

dir

ect m

arke

ting

effo

rts

to th

e m

arke

t’s p

rior

itie

s ov

er th

ene

xt t

wo

year

s.

BU

SIN

ESS

UN

CE

RT

AIN

TIE

S

Th

e em

erge

nce

of

th

e w

hol

esal

er

Pega

sus,

m

ajor

ity-

own

ed

byC

hapt

ers,

and

the

ir r

ole

in t

he C

anad

ian

publ

ishi

ng i

ndus

try

in 1

999

intr

oduc

ed s

ome

unce

rtai

nty

into

the

Div

isio

n’s

mar

ket

and

incr

ease

dit

s fo

cus

on o

ne c

usto

mer

.

Can

adia

ns a

re in

crea

sing

ly b

uyin

g bo

oks

onlin

e—fr

om b

oth

Can

adia

nan

d gl

obal

onl

ine

reta

ilers

. Des

pite

cop

yrig

ht a

nd te

rrit

ory

rest

rict

ions

,it

will

be

virt

ually

impo

ssib

le t

o pr

otec

t C

anad

ian

terr

itor

y ri

ghts

wit

hth

e pr

olife

rati

on o

f gl

obal

onl

ine

reta

ilers

.

CA

NA

DIA

NP

UB

LIS

HIN

GP

RO

GR

AM

In 1

999,

the

Div

isio

n fo

cuse

d on

the

man

agem

ent,

sm

all

busi

ness

,tr

aini

ng,

and

pers

onal

fin

ance

cat

egor

ies—

twen

ty t

itle

s w

ere

pub-

lishe

d. T

he f

ront

list

exce

eded

the

pre

viou

s ye

ar b

y 18

% a

nd t

he a

ver-

age

reve

nue

per

titl

e in

crea

sed

by 2

0% o

ver

1998

.

Two

of t

he T

rade

, Pr

ofes

sion

al a

nd M

edic

al D

ivis

ion’

s C

anad

ian

best

-se

llers

in

the

man

agem

ent

cate

gory

hig

hlig

hted

Can

adia

n bu

sine

sssu

cces

s st

orie

s: P

ower

Ret

ail:

Win

ning

Str

ateg

ies

from

Cha

pter

s an

d ot

her

Lead

ing

Ret

aile

rs in

Can

ada,

by L

awre

nce

Stev

enso

n, J

osep

h Sh

lesi

nger

,an

d M

icha

el P

earc

e an

d T

he M

aver

icks

: Les

sons

from

the

Wes

t’s W

inni

ngEn

trep

rene

urs,

by P

aul G

resc

oe.

Wit

h th

e go

al o

f le

vera

ging

the

Com

pany

’s in

telle

ctua

l pr

oper

ty,

the

Div

isio

n co

ntin

ued

to s

ecur

e bo

th e

lect

roni

c ri

ghts

agr

eem

ents

and

tran

slat

ion

righ

ts.

As

exam

ples

, In

tuit

Can

ada

Lim

ited

lic

ense

d se

v-er

al o

f th

e D

ivis

ion’

s ti

tles

tha

t w

ere

bund

led

wit

h it

s ow

n pr

oduc

t,an

d tr

ansl

atio

n ri

ghts

wer

e gr

ante

d fo

r th

e Ja

pane

se t

rans

lati

on o

fT

heVa

lue

Ent

erpr

ise

by R

icha

rd T

ully

, Jo

hn D

onov

an,

and

Bren

tW

ortm

an.

Build

ing

on M

cGra

w-H

ill’s

stre

ngth

s in

the

glo

bal

mar

ketp

lace

, th

isD

ivis

ion

cont

inue

d to

foc

us o

n pu

blis

hing

tit

les

wit

h in

tern

atio

nal

sale

s po

tent

ial.

In 1

999,

the

tra

inin

g ti

tles

wer

e pa

rtic

ular

ly w

ell

rece

ived

; fo

r ex

ampl

e, Q

ualit

y St

anda

rds

for

Eval

uatin

g M

ultim

edia

and

Onl

ine

Trai

ning

, by

Lynn

ette

Gill

is,

rece

ived

an

endo

rsem

ent

from

the

AST

D (

Am

eric

an S

ocie

ty o

f Tr

aini

ng a

nd D

evel

opm

ent)

.

Tra

de P

rofe

ssio

nal

and

Med

ical

Div

isio

nSA

LE

SG

RO

WT

H

In

1999

, the

Tra

de, P

rofe

ssio

nal a

nd M

edic

al D

ivis

ion

post

ed d

oubl

e-di

git r

even

ue g

row

th fo

r th

e si

xth

cons

ecut

ive

year

as

the

trad

e bo

ok m

arke

t

rem

aine

d re

d-ho

t. T

his

tran

slat

ed in

to a

55%

incr

ease

in t

he b

otto

m li

ne. T

he s

ucce

ss o

f Can

adia

n on

line

book

ret

aile

rs, t

he c

ontin

ued

rollo

ut o

f

supe

rsto

res

acro

ss C

anad

a, a

nd t

he e

xecu

tion

of t

arge

ted

mar

ketin

g pr

ogra

ms

wer

e ke

y co

ntri

buto

rs t

o th

e re

mar

kabl

e m

arke

t pe

rfor

man

ce a

s w

as t

he

soar

ing

Can

adia

n ec

onom

y. T

he T

rade

bus

ines

s sa

w a

rev

enue

incr

ease

of 3

7% o

ver

the

prio

r ye

ar, s

urpa

ssin

g in

dust

ry-r

epor

ted

stat

istic

s of

18%

.

Thi

s ye

ar s

aw M

cGra

w-H

ill’s

Day

Tra

ding

boo

ks fi

rst

to m

arke

t, an

d th

ey fu

elle

d th

e en

orm

ous

grow

th in

the

bus

ines

s an

d in

vest

ing

cate

gory

. As

wel

l,

sale

s in

the

com

putin

g ca

tego

ry d

oubl

ed.

In 1

999,

the

Trad

e, P

rofe

ssio

nal a

nd M

edic

al D

ivis

ion

bene

fited

from

The

McG

raw

-Hill

Com

pani

es, I

nc.’s

acq

uisi

tion

of th

e re

spec

ted

App

leto

n &

Lan

ge

med

ical

list

, whi

ch e

ffect

ivel

y do

uble

d th

e D

ivis

ion’

s m

edic

al li

st a

nd r

even

ues.

Build

ing

on th

e su

cces

s of

the

Can

adia

n pu

blis

hing

pro

gram

and

exp

andi

ng th

e D

ivis

ion’

s bu

sine

ss b

ook

prog

ram

to m

eet t

he C

anad

ian

cons

umer

’s bu

si-

ness

nee

ds w

ere

othe

r ke

y in

itiat

ives

, whi

le t

he D

ivis

ion

deliv

ered

sev

eral

bes

tsel

lers

on

man

agem

ent

subj

ects

.

The

Div

isio

n po

sted

doub

le-d

igit

reve

nue

grow

th fo

r th

e si

xth

cons

ecut

ive

year

.

Can

adia

ns a

rein

crea

sing

ly b

uyin

gbo

oks

onlin

e.

12B

roug

ht to

you

by

Glo

bal R

epor

ts

Page 14

OU

TL

OO

KFi

scal

20

00

prom

ises

to

be

an

othe

r ch

alle

ngin

g an

dre

war

ding

yea

r. T

here

will

like

ly b

e a

decr

ease

in t

he r

ate

of C

anad

ian

supe

rsto

re o

peni

ngs

and

a co

ntin

ued

incr

ease

in o

nlin

e bo

ok p

urch

ases

in b

oth

prin

t and

dig

ital f

orm

ats.

In a

ny e

vent

, cu

stom

ers

will

hav

e m

ore

purc

hase

opt

ions

and

pow

er t

han

ever

bef

ore.

In 2

000,

the

Tra

de, P

rofe

ssio

nal a

nd M

edic

al D

ivis

ion

plan

s to

impr

ove

thei

r pr

esen

ce in

the

mar

ket a

nd im

prov

epr

ofita

bilit

y th

roug

h th

e fo

llow

ing

initi

ativ

es:

•C

ontin

uing

to

inve

st in

str

ateg

ic c

ompu

ter

and

busi

ness

boo

k m

arke

ting;

•Im

plem

entin

g a

Web

mar

ketin

g pl

an;

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lect

ivel

y in

crea

sing

the

num

ber

of t

he D

ivis

ion’

sal

lianc

es t

o fu

lly m

eet

cust

omer

s’ ne

eds.

Som

e of

the

best

-sel

ling

title

s in

the

Trad

e, P

rofe

ssio

nal a

ndM

edic

al D

ivis

ion

wer

e as

follo

ws:

1.St

even

son/

Shle

sing

er/P

earc

e, P

ower

Ret

ail:

Win

ning

Stra

tegi

es f

rom

Cha

pter

s an

d ot

her

Lead

ing

Ret

aile

rs in

Can

ada

2.K

och,

Ora

cle

8 C

ompl

ete

Ref

eren

ce

3.Ti

ntin

alli,

Em

erge

ncy

Med

icin

e,

Fifth

Edi

tion

4.N

eiba

uer,

Wor

dPer

fect

Offi

ce 2

000:

T

he O

ffice

Gui

de

5.N

assa

r, H

ow t

o G

et S

tart

ed in

Ele

ctro

nic

Day

Tra

ding

6.Pi

ne/G

ilmor

e, T

he E

xper

ienc

e E

cono

my:

Wor

k is

The

atre

and

Eve

ry B

usin

ess

a St

age

13B

roug

ht to

you

by

Glo

bal R

epor

ts

Page 15

SAL

ES

HIS

TO

RY

AN

DG

RO

WT

H

Che

neliè

re/M

cGra

w-H

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as s

truc

ture

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pub

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rogr

am to

mee

tth

e ne

eds

of F

renc

h-sp

eaki

ng s

tude

nts

and

educ

ator

s ac

ross

Can

ada.

Wit

h a

full-

tim

e co

mpl

emen

t of

six

ty e

mpl

oyee

s, D

LC p

ublis

hes

and

tran

slat

es r

esou

rces

for

gra

des

K–1

2 as

wel

l as

col

lege

and

uni

vers

ity.

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rty

scho

ol t

itle

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r ye

ar,

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ell

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uébe

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d ac

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ada.

Thr

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publ

ishi

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stri

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men

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opea

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DLC

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Fra

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Bel

gium

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neliè

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titl

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cGra

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AD

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bec

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hene

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as a

dopt

ed a

dec

ided

ly C

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pers

pect

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year

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esou

rces

spe

cific

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ada

pted

to

the

need

s of

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coph

one

and

Fren

ch-i

mm

ersi

on m

arke

ts a

cros

s C

anad

a.

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la

test

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ambi

tiou

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inv

olve

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Can

adia

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a te

am o

f ei

ght-

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peop

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ssem

bled

to

publ

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raw

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rson

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cien

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m

SCIE

NC

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sim

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ch

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wee

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ontr

eal

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tby,

ac

hiev

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its

first

im

port

ant

mile

ston

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the

publ

icat

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of O

MN

ISC

IEN

CES

9 in

tim

e fo

r th

e im

plem

enta

tion

of

the

new

Ont

ario

cur

ricu

lum

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SIN

ESS

UN

CE

RT

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TIE

S

Wit

h fe

wer

tha

n on

e m

illio

n Fr

ench

-spe

akin

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uden

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inco

llege

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d un

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ada,

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neliè

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disc

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tern

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MD

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in

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ench

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aloi

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Dun

od,

Mas

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tugu

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d

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m

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tern

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m

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rese

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,C

hene

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raw

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con

tinu

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ighe

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ucat

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title

s fo

r Q

uébe

c an

d fo

r

Fren

ch-l

angu

age

colle

ges

and

univ

ersi

ties

thro

ugho

ut C

anad

a si

nce

1965

. Its

title

s ar

e m

arke

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ders

in a

ccou

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scie

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50 a

ctiv

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any

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les

are

indi

geno

us w

orks

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appr

oxim

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% a

re t

rans

latio

ns a

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dapt

atio

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f Am

eric

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ian

wor

ks.

Follo

win

g an

alli

ance

est

ablis

hed

in 1

995

betw

een

Les

Editi

ons

de l

a C

hene

lière

(D

LC),

McG

raw

-Hill

Rye

rson

Lim

ited,

and

The

McG

raw

-Hill

Com

pani

es,

Inc.

, “D

LC,”

a n

on-r

elat

ed,

priv

atel

y-he

ld,

inde

pend

ent

com

pany

bas

ed i

n M

ontr

eal,

publ

ishe

s Fr

ench

-lan

guag

e pr

oduc

ts u

nder

the

joi

nt

Che

neliè

re/M

cGra

w-H

ill im

prin

t.

Publ

ishi

ng r

esou

rces

. .

. ad

apte

d to

the

need

s of

the

Fran

coph

one

and

Fren

ch-i

mm

ersi

onm

arke

ts.

14B

roug

ht to

you

by

Glo

bal R

epor

ts