Contents 01 Financial highlights 03 Operating and financial review 22 Structure and corporate governance 27 Report of the audit committees 29 Directors’ remuneration report 40 Accounting policies 42 Combined financial statements 46 Notes to the combined financial statements 70 Independent auditors’ report 72 Financial highlights 73 Directors’ report 76 Accounting policies 77 Financial statements 81 Notes to the financial statements 88 Independent auditors’ report 90 Financial highlights 91 The Supervisory Board’s report 91 The Executive Board’s report 92 Accounting policies 94 Financial statements 97 Notes to the financial statements 104 Independent auditors’ report 104 Other information 106 Reed Elsevier combined businesses 111 Reed Elsevier PLC 113 Reed Elsevier NV 115 Principal operating locations Reed Elsevier combined financial statements Reed Elsevier PLC annual report and financial statements Reed Elsevier NV annual report and financial statements Additional information for US investors This document contains Annual Reports information and the Financial Statements in respect of the Reed Elsevier combined businesses and the two parent companies, Reed Elsevier PLC and Reed Elsevier NV. This, together with the separate summary document Reed Elsevier Annual Review and Summary Financial Statements 2003, forms the Annual Reports and Financial Statements of Reed Elsevier PLC and Reed Elsevier NV for the year ended 31 December 2003 and the two documents should be read together.