COMBINED FINANCIAL STATEMENTS > NOTES TO THE COMBINED FINANCIAL STATEMENTS Cost of sales and operating expenses 2 2003 2002 Before Amortisation Before Amortisation amortisation of goodwill amortisation of goodwill and and and and exceptional intangible Exceptional exceptional intangible Exceptional items assets items Total items assets items Total £m £m £m £m £m £m £m £m Cost of sales Continuing operations 1,733 – – 1,733 1,794 – – 1,794 Acquisitions 31 – – 31 – – – – Total 1,764 – – 1,764 1,794 – – 1,794 Distribution and selling costs Continuing operations 1,036 – – 1,036 1,117 – – 1,117 Acquisitions 14 – – 14 – – – – 1,050 – – 1,050 1,117 – – 1,117 Administrative expenses Continuing operations 933 418 66 1,417 996 524 99 1,619 Acquisitions 19 24 6 49 – – – – 952 442 72 1,466 996 524 99 1,619 Operating expenses Continuing operations 1,969 418 66 2,453 2,113 524 99 2,736 Acquisitions 33 24 6 63 – – – – Total 2,002 442 72 2,516 2,113 524 99 2,736 2003 2002 Before Amortisation Before Amortisation amortisation of goodwill amortisation of goodwill and and and and exceptional intangible Exceptional exceptional intangible Exceptional items assets items Total items assets items Total € m € m € m € m € m € m € m € m Cost of sales Continuing operations 2,513 – – 2,513 2,852 – – 2,852 Acquisitions 45 – – 45 – – – – Total 2,558 – – 2,558 2,852 – – 2,852 Distribution and selling costs Continuing operations 1,502 – – 1,502 1,776 – – 1,776 Acquisitions 21 – – 21 – – – – 1,523 – – 1,523 1,776 – – 1,776 Administrative expenses Continuing operations 1,353 606 96 2,055 1,585 833 157 2,575 Acquisitions 26 35 9 70 – – – – 1,379 641 105 2,125 1,585 833 157 2,575 Operating expenses Continuing operations 2,855 606 96 3,557 3,361 833 157 4,351 Acquisitions 47 35 9 91 – – – – Total 2,902 641 105 3,648 3,361 833 157 4,351 48 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003