REED ELSEVIER NV Cash flow statements For the year ended 31 December 2003 Group Parent Company 2003 2002 2003 2002 Note € m € m € m € m Net cash outflow from operating activities 10 (2) – (2) – Dividends received from joint ventures 200 150 200 150 Returns on investments and servicing of finance  – interest received 7 6  7 6  Taxation (2) (3) (2) (3) Equity dividends paid (215) (222) (215) (222) Cash outflow before changes in short term investments and financing (12) (69) (12) (69) Decrease in short term investments 8 10 8 10 Financing 4 59  4 59  Issue of shares, net of expenses 3 22 3 22 Net issue/(repayment) of debenture loans 1 (1) 1 (1) Decrease in funding balances to joint ventures 10  – 38  – 38  Change in net cash – – – – Short term investments include deposits of under one year if the maturity or notice period exceeds 24 hours, commercial paper investments and interest bearing securities that can be realised without significant loss at short notice. Statements of total recognised gains and losses For the year ended 31 December 2003 Group Parent Company 2003 2002 2003 2002 € m € m € m € m Profit attributable to ordinary shareholders 242 144  203 152  Exchange translation differences (310) (303) – – Total recognised gains and losses (68) (159) 203 152 Group financial statements, reflecting Reed Elsevier NV’s 50% interest in the Reed Elsevier combined businesses, are presented using the gross equity method. REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 95