Financial highlights For the year ended 31 December 2003 Reed Elsevier combined businesses The Reed Elsevier combined businesses encompass the businesses of Reed Elsevier Group plc and Elsevier Reed Finance BV, together with their two parent companies, Reed Elsevier PLC and Reed Elsevier NV (the “Reed Elsevier combined businesses”). The results of Reed Elsevier PLC reflect its shareholders’ 52.9% economic interest in the Reed Elsevier combined businesses. The results of Reed Elsevier NV reflect its shareholders’ 50% economic interest in the Reed Elsevier combined businesses. The respective economic interests of the Reed Elsevier PLC and Reed Elsevier NV shareholders take account of Reed Elsevier PLC’s 5.8% interest in Reed Elsevier NV. The financial highlights presented refer to “adjusted” profit and cash flow figures. These figures are used by the Reed Elsevier businesses as additional performance measures and are stated before the amortisation of goodwill and intangible assets, exceptional items and related tax effects. A reconciliation between the reported and adjusted figures is provided in the notes to the financial statements. The percentage change at constant currencies refers to the movements at constant exchange rates, using 2002 full year average rates. Change at constant 2003 2002 2003 2002 currencies £m £m € m € m % Reported figures Turnover 4,925 5,020 7,141 7,982 1% Operating profit 661 507 958 806 29% Profit before taxation 519 289 752 460 75% Net borrowings 2,372 2,732 3,368 4,180 Adjusted figures  Operating profit 1,178 1,133 1,708 1,801 6% Profit before taxation 1,010 927 1,465 1,474 10% Operating cash flow 1,028 1,010 1,491 1,606 3% Operating margin 24% 23% 24% 23% Operating cash flow conversion 87% 89% 87% 89% Interest cover (times) 7.0 5.5 7.0 5.5 Change Reed Elsevier PLC Reed Elsevier NV at constant 2003 2002 % 2003 2002 % currencies £m £m change € m € m change % Reported profit attributable 169 89 90% 242 144 68% Adjusted profit attributable 394 361 9% 540 542 – 10% Average exchange rate  € :£ 1.45 1.59 1.45 1.59 Reported earnings per share 13.4p 7.0p 91% € 0.31 € 0.18 72% Adjusted earnings per share 31.2p 28.5p 9% € 0.69 € 0.69 – 10% Dividend per share 12.0p 11.2p 7% € 0.30 € 0.30 – Parent companies REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 1