ADDITIONAL INFORMATION FOR US INVESTORS > REED ELSEVIER COMBINED BUSINESSES Effects on net income of material differences to US GAAP Effects on combined shareholders’ funds of material differences to US GAAP As at 31 December 2003 2003 2002 2003 2002 £m £m € m € m Combined shareholders’ funds as reported 2,434 2,640 3,456 4,039 US GAAP adjustments: Goodwill and intangible assets 1,354 1,302 1,923 1,992 Deferred taxation (828) (838) (1,176) (1,283) Pensions 185 151 263 231 Derivative instruments (69) (117) (98) (179) Available for sale investments 3 3 4 5 Equity dividends 226 205 321 314 Other items (2) (2) (3) (3) Combined shareholders’ funds under US GAAP 3,303 3,344 4,690 5,116 For the year ended 31 December 2003 2003 2002 2003 2002 £m £m € m € m Net income as reported 334 181 484 288 US GAAP adjustments: Goodwill and intangible assets 121 223 176 355 Deferred taxation (40) (50) (58) (80) Pensions 75 56 109 89 Stock based compensation 7 – 10 – Derivative instruments 41 (45) 59 (72) Net income under US GAAP 538 365 780 580 110 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003