COMBINED FINANCIAL STATEMENTS > NOTES TO THE COMBINED FINANCIAL STATEMENTS Financial instruments 22 Currency and interest rate profile of financial liabilities Currency and interest rate profile of financial assets 62 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 Details of the objectives, policies and strategies pursued by Reed Elsevier in relation to financial instruments are set out in the Operating and Financial Review on pages 3 to 21. For the purpose of the disclosures which follow in this note, short term debtors and creditors have been excluded, as permitted under FRS13: Derivatives and Other Financial Instruments. Included within fixed rate financial liabilities as at 31 December 2003 are £nil/ € nil (2002: £78m/ € 119m) of US dollar term debt and £421m/ € 598m (2002: £281m/ € 430m) of interest rate swaps and options denominated principally in US dollars that mature within one year. The currency and interest rate profile of the aggregate financial assets of £702m/ € 997m (2002: £649m/ € 993m), after taking account of interest rate swaps, is set out below: Fixed rate financial liabilities Floating rate Fixed rate Floating rate Fixed rate financial financial financial financial Weighted Weighted liabilities liabilities liabilities liabilities average average £m £m € m € m interest rate term (years) 2003 US dollar 674 1,789 957 2,540 6.3% 6.0 Sterling 5 – 7 – – – Euro 380 156 540 222 5.4% 2.8 Other currencies 70 – 99 – – – Total 1,129 1,945 1,603 2,762 6.3% 5.8 Fixed rate financial liabilities Floating rate Fixed rate Floating rate Fixed rate financial financial financial financial Weighted Weighted liabilities liabilities liabilities liabilities average average £m £m € m € m interest rate term (years) 2002 US dollar 478 2,307 731 3,530 6.5% 7.6 Sterling 19 – 29 – – – Euro 363 143 555 219 5.6% 4.3 Other currencies 81 – 124 – – – Total 941 2,450 1,439 3,749 6.4% 7.4 The currency and interest rate profile of the aggregate financial liabilities of £3,074m/ € 4,365m (2002: £3,391m/ € 5,188m), after taking account of interest rate and currency derivatives, is set out below: Interest Non interest Interest Non interest bearing bearing bearing bearing financial financial financial financial assets assets assets assets £m £m € m € m 2003 US dollar 88 54 125 77 Sterling 326 – 463 – Euro 192 6 273 9 Other currencies 32 4 45 5 Total 638 64 906 91