2002 Weighted average number Earnings of shares EPS £m (millions) pence Basic EPS 89 1,264.7 7.0 Diluted EPS 89 1,270.8 7.0 EPS based on 52.9% economic interest in the Reed Elsevier combined businesses 96 1,264.7 7.6 Adjusted EPS 9 361 1,264.7 28.5 Reconciliation of operating loss to net cash outflow from operating activities 2003 2002 £m £m Operating loss (1) (1) Net movement in debtors and creditors – 1 Net cash outflow from operating activities (1) – £m At 1 January 2003 537 Cash flow 11 At 31 December 2003 548 Reconciliation of net funding balances to Reed Elsevier Group plc group The diluted EPS figures are calculated after taking into account the effect of share options. REED ELSEVIER PLC > NOTES TO THE FINANCIAL STATEMENTS Cash flow statement 11 2003 Weighted average number Earnings of shares EPS Note £m (millions) pence Basic EPS 169 1,263.7 13.4 Diluted EPS 169 1,265.4 13.4 EPS based on 52.9% economic interest in the Reed Elsevier combined businesses 177 1,263.7 14.0 Adjusted EPS 9 394 1,263.7 31.2 Earnings per ordinary share (EPS) 10 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 83