REED ELSEVIER PLC Consolidated profit and loss account For the year ended 31 December 2003 2003 2002 Note £m £m Turnover Including share of turnover of joint ventures 2,605 2,656 Less: share of turnover of joint ventures (2,605) (2,656) – – Administrative expenses (1) (1) Operating loss (before joint ventures) 3 (1) (1) Share of operating profit of joint ventures Before amortisation and exceptional items 1 616 593 Amortisation of goodwill and intangible assets (235) (279) Exceptional items (38) (52) 343 262 Operating profit including joint ventures 342 261 Share of non operating exceptional items of joint ventures 14 (6) 14 (6) Net interest income/(expense) Group 6 3 3 Share of net interest of joint ventures (92) (112) (89) (109) Profit on ordinary activities before taxation 267 146 Tax on profit on ordinary activities 7 (98) (57) UK corporation tax (1) (1) Share of tax of joint ventures (97) (56) Profit attributable to ordinary shareholders 169 89 Equity dividends paid and proposed 8 (152) (143) Retained profit/(loss) taken to reserves 17 (54) 2003 2002 Note £m £m Adjusted profit before tax 9 534 490 Adjusted profit attributable to ordinary shareholders 9 394 361 Adjusted figures Adjusted figures, which exclude the amortisation of goodwill and intangible assets, exceptional items and related tax effects, are presented as additional performance measures, and are reconciled to the reported figures in note 9 to the financial statements. 2003 2002 Note pence pence Basic EPS 10 13.4 7.0 Diluted EPS 10 13.4 7.0 EPS based on 52.9% economic interest in the Reed Elsevier combined businesses 10 14.0 7.6 Adjusted EPS 10 31.2 28.5 Earnings per ordinary share (“EPS”) The above amounts derive from continuing activities. REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 77