Exhibit 99.2

                 2Q 2004 EARNINGS CONFERENCE CALL
           Remarks of Thomas O. Ryder, Chairman and CEO
                         January 28, 2004


Good morning, and thank you for joining us.

I hope the weather where you are is better than where we are!

I once wrote a business plan for a company, which included the
following sentence:  "The main thing is to keep the main thing
the main thing."

The English was tortured, but the logic was not.  It argued for
focus.

At Reader's Digest, our focus has one overriding goal:

Fix this business.

Our two-year plan, announced at the end of Fiscal '03, is our
path to resuming year-over-year revenue and profit growth
beginning next year.  Currently, we are focused on accomplishing
three things:

  1.  Make the right moves to lay the groundwork for sustainable
      revenue and profit growth.
  2.  Improve our already strong cash flow and use it to pay down
      debt and ultimately to reward shareholders.
  3.  Demonstrate measurable signs of progress toward our goals
      for next year.

Our plan focuses on addressing difficult problems in our core
businesses and investing in long-term opportunities.  We
predicted a difficult year - tougher in the first half, better in
the second.

We were right about the first half being tough, and I think we
will be right about the second too.  We will be somewhat off in
magnitude, but I like the progress we are making in the plan
toward sustainable growth.

Let's start by discussing an important quarter.  We came close to
our internal plan, but we got there in a different way than
expected.

The core business performed ahead of plan, particularly Reader's
Digest and some of our magazines.  The US BHE business came in
stronger than expected.  International was down compared with
last year, although its net results were about what we expected.

We made significant progress against our key business metrics...
the 15 targets that we established to chart the company's
progress against its plan.  These are the signposts along the
road helping us keep "the main thing the main thing."  I'm going
to take you through where we are with these metrics a bit later.

Cash flow was stronger than we expected again, and we managed to
pay down $155 million in debt.  We are $19 million better in cash
at mid-year.  In part, cash was stronger from larger deferred
subscription revenue being generated from the success of our
increased magazine acquisition investments.

The surprise and the disappointment came from QSP and Books Are
Fun.  Both performed poorly in the quarter.  But, I don't think
their issues are nearly as serious or as lasting as those we
faced in our core business.

Let's look at the overall 2Q results:

EPS came in at $0.67 compared with $0.84 a year ago.  The
majority of the decline reflects lower operating profits at
Consumer Business Services and to a lesser extent International,
as well as some higher, mostly non-cash Corporate overhead
expenses.

Mike Geltzeiler will give you more details about our cash-flow
improvement and other matters.

Let's talk about our three operating segments.

Consumer Business Services

The key drivers of this segments are Books Are Fun and QSP.  It
also includes Children's Publishing, Trade Publishing, Young
Families and Financial Services.  QSP and Books Are Fun were the
disappointments in the quarter, so let's concentrate there.

They contributed some $270 million in revenue and $80 million in
operating profit.  They were the Company's major profit
contributors in the quarter, but were off about 8% in revenue and
20% in profit.  Both shared some issues - increased competition,
lost sales reps, lower average orders and fewer sales events.
And, both are aggressively addressing these and other issues
which are affecting their business.  Books Are Fun will be
discussed in some detail by Bob Raymond in a few moments, so I'm
going to concentrate on QSP.

In simplest terms, QSP had lower sales this fall because they
lost some accounts and they sold less at each fund-raising event
they did have.

The shortfall in the number of fundraising events was a result of
sales staff turnover in certain territories. While we replaced
these sales reps immediately, not all of their schools were
retained through the transition.

Same school sales declined from the prior year for three reasons.

First, schools where new hires replaced experienced sales reps
did not do as well.  It takes about a year for a new rep to get
up to speed.

Second, increased competitive fundraising activity in the schools
in which we operate caused a dilution of the results of our
events.

And, finally, our consumers bought slightly cheaper products and
slightly fewer of them.  We think this is a reflection of a soft
consumer economy this fall and early winter.

We are addressing those issues.  We have already replaced lost
staff, and we have trained them and we have strategically
identified critical segments of existing markets for them to
enter. We have directed many of them to lead our entry into new
markets like college, high school and sports organizations.  This
activity should help our long-term growth.  We have expanded our
on-line fund-raising efforts and introduced numerous marketing
programs and incentives designed to increase new account
acquisition and improve the retention of existing accounts.

This is a business with a lot of smart work going on and I am
sure you're going to see that in their future results.



International Businesses

We continue to make progress in the turnaround of our
International Businesses.  Tom Gardner is implementing his global
plan to restore profit growth and stop the sharp profit declines
of the last two years.  The plan has three elements,
"Restructure, Restore and Invest."  It called for lower revenues
and profits in the first half of this year as we reduced mail
quantities, streamlined business processes, consolidated regions
and exited marginal businesses.  Then it calls for improved
year-over-year performance starting in the second half.



Response rates in many markets have stabilized relative to a year
ago, but underlying trends are still soft in others.   Improved
economies would help.



The "restructure" phase is on track.  The majority of job
eliminations in our global program are overseas, and they have
been completed.  The International staff is about 20 percent
smaller than a year ago.  Significant cost savings have been
achieved by consolidating 12 mid-sized markets into two regions.
We re-engineered our three largest markets, Germany, the United
Kingdom and France, by eliminating operating inefficiencies,
improving product and promotion flow and significantly reducing
overhead.  We expect that the impact of the lower cost base will
begin to favorably affect profits in the second half of this
fiscal year.



For the quarter, operating profits were $23 million, $6 million
below last year.  The decline in profits has markedly slowed.



In the second half, our focus will be to achieve those improved
year-over-year results, largely thanks to the greater
efficiencies implemented during the past 12 months.  We should
also begin seeing some benefit from first half investments.



Our growth investments are aimed at new customer acquisition, new
product development, expansion of BAF into international markets
and entry into new countries with our core businesses.  We have
had early success testing our Young Families business in Germany
and this could be a new customer producer.  We have had
significant success introducing our Select Editions (condensed
books) product line in India.  We have had no success with our
new magazine launch in the UK and are likely to close that
project.  We will test another new magazine - Taste of Brazil in
the fourth quarter.  We have had good success with BAF in Spain
and will test two more major European markets before the end of
the year.  We are testing our core business in four new markets
in central Europe.  And the first of those, Romania, has been
successful and will proceed to full startup within six months.
Lots going on here.


Reader's Digest North America

I am very encouraged about what we have just seen at RD North
America, where operating profits improved 13 percent to $32
million and revenues grew $1 million to $235 million.  Margins
improved slightly, reflecting largely improved efficiency in the
subscription acquisition program at Reader's Digest magazine.  In
fact, margins in our magazine group will improve almost 70% this
year, and we expect another 50% increase within three years.

Profits AND revenues grew at U.S. BHE, which is a pretty good
achievement for a group that has been literally devastated by
changes in sweepstakes regulations.  We created a plan to fix
this very difficult set of problems two years ago and our
progress is ahead of that plan.  BHE could well return to
profitability this year.

Revenues were up slightly at Reiman but profits were down
primarily as a result of increased investment in magazine
circulation.  Canada was up slightly in both revenues and
profits, but down slightly after foreign exchange adjustments.
Both businesses look stronger for the spring.

Overall, we were able to drive profit growth in North America
despite investing close to $3 million in these new initiatives.

This is the sixth consecutive quarter of operating profit growth
in the "core" RD North America business.  Year-to-date, these
profits are up 13 percent.


Aggressive new development work is going on in the North American
division with Reiman, Reader's Digest Magazine group and Canada
all working on a series of new projects.  There are literally too
many to mention so we will devote part of a quarterly meeting to
just new development soon.  Three are major and are happening
right now so I will mention them.  All are magazine development
projects.

The first is RD Specials.  It was started only 14 months ago, and
is a series of special interest magazines which appear about
every three weeks exclusively on newsstands and primarily at
supermarket checkout counters.  We use both Reiman and Reader's
Digest brands and editorial material from both companies.  For
example, Taste of Home, "Home Cooking Made Easy", is on the
stands now and encourage you to go out and buy it today.  Sales
have significantly exceeded expectations and this product line
will be profitable this fiscal year - at least a year earlier
than expected.  Perhaps most significant is a trend:  this
product line's sales were ranked #18 out of some 750 magazine
sold at WAL-MART in the last quarter, and it has improved each
quarter.

The second big project is Our Canada.  This magazine is being
introduced in a high-profile rollout with separate mini-launches
in eight provinces across Canada.  The road show includes
presentations and television appearances by our editors. The
early results of both subscription and newsstand sales look very
strong.

The third concept is another Reiman-inspired magazine called
Backyard Living, which is sold by subscription and newsstand.
More than 270,000 people have already subscribed for the first
issue and we are in the first month of launch.  It is early, but
this one, too, looks very good.

Let's go back to visit our list of metrics.  As I mentioned, we
were on track or ahead of the pace for most of our targets.

  -   Through the close of the quarter, the Company was on track
      to achieve free cash flow in excess of $162 million.
  -   We are on track to achieve year-end net debt reduction to
      below $700 million...
  -   We reduced staffing levels by more than 500 full-time
      employees.  To date, we have eliminated an annualized $55
      million in company-wide overhead expenses.  As you may
      remember, the target was to remove $70 million by the end of
      Fiscal 2005.
  -   We are on track to achieve breakeven or better profits at US
      BHE...
  -   Our new magazine tests in the U.S. and Canada look to be
      working and will likely proceed to launch.  The UK test was
      suspended due to light demand.  A test in Brazil remains
      ahead for this summer.
  -   The Books Are Fun launch in Spain is on plan.
  -   We are on track to achieve a one percentage point
      improvement in operating profit margin at RD North America
      from seven percent to eight percent.  We expect double-digit
      profit growth for the year.
  -   We are on track to achieve year-over-year second half growth
      and a one percentage point improvement in operating profit
      margin at International from five to six percent.  We expect
      double-digit profit growth in the second half of the year

These metrics are all on track and they augur well for our
longer-term objectives.  We are on plan to achieve 12 of 15.

At the same time, we missed our targets in the critical second
quarter at both Books Are Fun and QSP, and that is not good
news.  We understand the issues, and we are working on them.  We
expect both businesses to improve in the second half.  In fact,
we expect all of our businesses to improve in the second half.
But, unfortunately, we don't expect it to be enough to offset our
BAF and QSP second quarter shortfall.  So, we are reducing our
guidance range by $.10 to $.65-$.75 per share.

The guidance does not include restructuring charges.  Nor does it
include a major event we expect to take place as early as second
half:  this is the sale of our headquarters building and land in
Chappaqua, New York.

That decision was made by our Board last Friday and announced
then.  It had been under consideration for at least a couple of
years as we sharpened our focus on re-engineering and the
re-deployment of under-performing assets.  As our re-engineering
progressed, occupancy declined here and grew elsewhere.  We were
occupying less and less of this building.  But, the timing was
not good for the outright sale of a major piece of commercial
real estate in Westchester County.

So, we looked at a lot of options, including moving to an
entirely new facility.   In the end, we decided it was best for
shareholders and employees not to move.  The plan is to sell our
property and to lease back only what we need.  And, in the
meantime, we believe the real estate stars have moved into almost
perfect alignment for this kind of transaction.  The process has
begun, and it will likely be completed within six months.  And,
although it is not in our projections, we expect two major
benefits from the sale:

  1.   First, we should have a major cash inflow which we will use
       to pay down our debt.
  2.   Second, this should produce significant reductions in
       overhead cost next year and on an ongoing basis.

So, a difficult quarter as we expected.  Surprising and
frustrating shortfalls at QSP and BAF.  But, strong improvements
at North America and International. Measurable success against
our key metrics, especially cash flow.  And, more wins than
expected with our investments in development projects.  This all
adds up to pretty solid progress in fixing our business and
getting it on a sustainable growth track.  And, that's the main
thing.

I would now like to turn the program over to my friend, Bob
Raymond, who will talk about Books Are Fun.  Bob is coming to you
live from BAF headquarters in Fairfield, Iowa.

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