Interim Results - Part 2
Reed International PLC
Elsevier NV
9 August 2000
Part 2
COMBINED FINANCIAL INFORMATION
Combined profit and loss account
FOR THE SIX MONTHS ENDED 30 JUNE 2000
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
Turnover
3,464 5,265 Including share of turnover 1,824 1,746 2,973 2,599
of joint ventures
(74) (112)Less: share of turnover of (29) (50) (47) (75)
joint ventures
3,390 5,153 1,795 1,696 2,926 2,524
3,390 5,153 Continuing operations 1,757 1,696 2,864 2,524
before acquisitions
- - Acquisitions 38 - 62 -
(1,185) (1,801)Cost of sales (654) (583) (1,066) (866)
2,205 3,352 Gross profit 1,141 1,113 1,860 1,658
(2,028) (3,083)Operating expenses (980) (932) (1,597) (1,389)
(1,420) (2,159)Before amortisation (756) (708) (1,232) (1,055)
and exceptional items
(369) (561)Amortisation of goodwill (191) (179) (311) (267)
and intangible assets
(239) (363)Exceptional items (33) (45) (54) (67)
177 269 Operating profit 161 181 263 269
(before joint ventures)
177 269 Continuing operations 167 181 273 269
before acquisitions
- - Acquisitions (6) - (10) -
3 5 Share of operating profit 8 1 12 1
of joint ventures
180 274 Operating profit including 169 182 275 270
joint ventures
Non operating exceptional items
7 11 Continuing - net profit on sale 66 - 108 -
of fixed asset investments
and businesses
187 285 Profit on ordinary activities 235 182 383 270
before interest
(82) (125)Net interest expense (43) (37) (70) (55)
105 160 Profit on ordinary 192 145 313 215
activities before taxation
(167) (254)Tax on profit on (90) (77) (146) (114)
ordinary activities
(62) (94)Profit/(loss) on ordinary 102 68 167 101
activities after taxation
(1) (1)Minority interests and - - - -
preference dividends
(63) (95)Profit/(loss) attributable to 102 68 167 101
parent companies' shareholders
(234) (356)Ordinary dividends paid (68) (107) (111) (159)
and proposed
(297) (451)Retained profit/(loss) 34 (39) 56 (58)
taken to combined reserves
ADJUSTED FIGURES
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
792 1,204 Adjusted operating profit 394 408 642 607
710 1,079 Adjusted profit before tax 351 371 572 552
527 801 Adjusted profit attributable to 260 276 424 411
parent companies' shareholders
Adjusted figures, which exclude the amortisation of goodwill and intangible
assets, exceptional items and related tax effects, are presented as additional
performance measures.
Combined cash flow statement
FOR THE SIX MONTHS ENDED 30 JUNE 2000
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
898 1,365 Net cash inflow from operating 347 309 566 460
activities before exceptional
items
(138) (210)Payments relating to exceptional (53) (67) (87) (99)
items charged to operating profit
760 1,155 Net cash inflow from operating 294 242 479 361
activities
4 6 Dividends received from joint 5 2 8 3
ventures
33 50 Interest received 13 20 21 30
(114) (173)Interest paid (62) (52) (101) (78)
(81) (123)Returns on investments and (49) (32) (80) (48)
servicing of finance
(173) (262)Taxation before exceptional items(45) (57) (73) (85)
74 112 Exceptional items 5 62 8 92
(99) (150)Taxation (40) 5 (65) 7
(137) (208)Purchase of tangible fixed assets(52) (71) (85) (106)
15 23 Proceeds from sale of fixed 6 4 10 6
assets
(122) (185)Capital expenditure (46) (67) (75) (100)
(166) (252)Acquisitions (462) (97) (753) (145)
(1) (2)Payments against acquisition - - - -
provisions
3 5 Exceptional net proceeds from 116 - 189 -
sale of fixed asset investments
and businesses
(164) (249)Acquisitions and disposals (346) (97) (564) (145)
(339) (515)Equity dividends paid to (123) (236) (200) (352)
shareholders of the parent
companies
(41) (61)Cash outflow before changes in (305) (183) (497) (274)
short term investments
and financing
297 451 Decrease in short term 180 143 293 213
investments
(197) (300)Financing 138 49 225 74
59 90 Increase in cash 13 9 21 13
Short term investments include deposits of under one year if the maturity or
notice period exceeds 24 hours, commercial paper investments and interest
bearing securities that can be realised without significant loss at short
notice.
ADJUSTED FIGURES
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
780 1,186 Adjusted operating cash flow 306 244 499 363
98% 98% Adjusted operating cash flow 78% 60% 78% 60%
conversion
Reed Elsevier businesses focus on adjusted operating cash flow as the key cash
flow measure. Adjusted operating cash flow is measured after dividends from
joint ventures, tangible fixed asset spend and proceeds from the sale of fixed
assets but before exceptional payments and proceeds. Adjusted operating cash
flow conversion expresses adjusted operating cash flow as a percentage of
adjusted operating profit.
Combined statement of total recognised gains and losses
FOR THE SIX MONTHS ENDED 30 JUNE 2000
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
(63) (95) Profit/(loss)attributable 102 68 167 101
to parent companies'
shareholders
17 405 Exchange translation 77 65 64 310
differences
(46) 310 Total recognised gains and 179 133 231 411
losses for the period
Combined shareholders' funds reconciliation
FOR THE SIX MONTHS ENDED 30 JUNE 2000
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
(63) (95) Profit/(loss) 102 68 167 101
attributable to parent
companies' shareholders
(234) (356) Ordinary dividends paid (68) (107) (111) (159)
and proposed
5 8 Issue of shares on exercise 4 (1) 6 (1)
of options, less
capital redemptions
17 405 Exchange translation 77 65 64 310
differences
(275) (38) Net increase/(decrease) 115 25 126 251
in shareholders' funds
2,130 3,025 Combined shareholders' 1,855 2,130 2,987 3,025
funds at the beginning of
the period
1,855 2,987 Combined shareholders' 1,970 2,155 3,113 3,276
funds at the end of
the period
Combined balance sheet
AS AT 30 JUNE 2000
As at 31 December As at 30 June As at 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
3,400 5,474 Goodwill and intangible 3,873 3,641 6,119 5,534
assets
505 814 Tangible assets and 497 528 786 803
investments
3,905 6,288 Fixed assets 4,370 4,169 6,905 6,337
113 183 Stocks 120 112 190 170
666 1,072 Debtors - amounts falling 713 650 1,126 988
due within one year
148 238 Debtors - amounts falling 171 143 270 217
due after more than one year
440 708 Cash and short term 278 567 440 862
investments
1,367 2,201 Current assets 1,282 1,472 2,026 2,237
(2,676)(4,308) Creditors: amounts falling (2,700) (2,777) (4,266)(4,221)
due within one year
(1,309)(2,107) Net current liabilities (1,418) (1,305) (2,240)(1,984)
2,596 4,181 Total assets less current 2,952 2,864 4,665 4,353
liabilities
(620) (998) Creditors: amounts falling (867) (680) (1,370)(1,034)
due after more than one year
(113) (182) Provisions for liabilities (105) (22) (166) (33)
and charges
(8) (14) Minority interests (10) (7) (16) (10)
1,855 2,987 Net assets 1,970 2,155 3,113 3,276
1,066 1,717 Net borrowings 1,481 1,247 2,340 1,895
Approved by the Boards of Reed International P.L.C. and Elsevier NV, 8 August
2000.
NOTES TO THE COMBINED FINANCIAL INFORMATION
1 BASIS OF PREPARATION
The Reed Elsevier combined financial information ('the combined financial
information') represents the combined interests of Reed International and
Elsevier shareholders and encompasses the businesses of Reed Elsevier plc and
Elsevier Reed Finance BV and their respective subsidiaries, associates and
joint ventures, together with the parent companies, Reed International and
Elsevier ('the combined businesses').
The combined financial information, which has been prepared on the basis of
the accounting policies set out in the Reed Elsevier Annual Reports &
Financial Statements 1999, is unaudited but has been reviewed by the auditors
and their report to the Boards of Reed International and Elsevier is set out
below.
2 EXCHANGE TRANSLATION RATES
In preparing the combined financial information the following exchange rates
have been applied:
Year ended
31 December 1999 Profit and loss Balance sheet
Profit Balance 30 June 30 June 30 June 30 June
and loss sheet 2000 1999 2000 1999
1.52 1.61 Euro to sterling 1.63 1.49 1.58 1.52
1.62 1.62 US dollars to sterling 1.57 1.62 1.52 1.57
0.94 0.99 Euro to US dollars 1.04 0.92 1.04 0.97
3 SEGMENT ANALYSIS
TURNOVER
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
Business segment
652 991 Scientific 345 318 562 473
1,268 1,927 Legal 647 609 1,055 906
1,470 2,235 Business 803 769 1,309 1,145
3,390 5,153 Total 1,795 1,696 2,926 2,524
Geographical origin
1,836 2,791 North America 995 927 1,622 1,379
698 1,061 United Kingdom 359 340 585 506
391 594 The Netherlands 196 203 319 302
307 467 Rest of Europe 162 155 264 231
158 240 Rest of World 83 71 136 106
3,390 5,153 Total 1,795 1,696 2,926 2,524
Geographical market
1,906 2,898 North America 1,021 951 1,664 1,415
484 736 United Kingdom 268 241 437 359
237 360 The Netherlands 114 113 186 168
418 635 Rest of Europe 209 217 341 323
345 524 Rest of World 183 174 298 259
3,390 5,153 Total 1,795 1,696 2,926 2,524
ADJUSTED OPERATING PROFIT -(EXCLUDING EXCEPTIONAL ITEMS AND AMORTISATION)
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
Business segment
231 351 Scientific 124 120 202 179
316 480 Legal 120 146 196 217
245 373 Business 150 142 244 211
792 1,204 Total 394 408 642 607
Geographical origin
359 547 North America 165 182 269 271
191 290 United Kingdom 94 99 153 147
135 205 The Netherlands 66 70 108 104
87 132 Rest of Europe 53 50 86 75
20 30 Rest of World 16 7 26 10
792 1,204 Total 394 408 642 607
OPERATING PROFIT (INCLUDING EXCEPTIONAL ITEMS AND AMORTISAION)
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
Business segment
111 169 Scientific 78 73 127 109
77 117 Legal 15 47 24 70
(8) (12)Business 76 62 124 91
180 274 Total 169 182 275 270
Geographical origin
(52) (79)North America (2) 11 (3) 16
86 131 United Kingdom 57 67 93 100
91 138 The Netherlands 64 64 104 95
51 78 Rest of Europe 39 37 64 55
4 6 Rest of World 11 3 17 4
180 274 Total 169 182 275 270
4 EXCEPTIONAL ITEMS
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
(161) (244)Reorganisation costs (27) - (44) -
(28) (43)Acquisition related (6) (10) (10) (15)
integration costs
(50) (76)Year 2000 compliance - (35) - (52)
costs
(239) (363)Charged to operating (33) (45) (54) (67)
profit
7 11 Net profit on sale of 66 - 108 -
fixed asset investments
and businesses
(232) (352)Total exceptional 33 (45) 54 (67)
credit/(charge)
15 23 Net tax credit 1 18 2 27
5 COMBINED CASH FLOW STATEMENT
Reconciliation of operating profit to net cash inflow from operating
activities
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
177 269 Operating profit 161 181 263 269
(before joint ventures)
239 363 Exceptional charges to 33 45 54 67
operating profit
416 632 Operating profit before 194 226 317 336
exceptional items
369 561 Amortisation of 191 179 311 267
goodwill and intangible
assets
117 178 Depreciation 55 55 90 82
(3) (5)Net SSAP24 pension - (2) - (3)
credit
483 734 Total non cash items 246 232 401 346
(1) (1)Movement in working (93) (149) (152) (222)
capital
898 1,365 Net cash inflow from 347 309 566 460
operating activities
before exceptional items
(138) (210)Payments relating to (53) (67) (87) (99)
exceptional items
charged to
operating profit
760 1,155 Net cash inflow from 294 242 479 361
operating activities
Reconciliation of net borrowings
Year
ended 31 Six months
December Short term ended 30 June
1999 Cash investments Borrowings 2000 1999
£m £m £m £m £m £m
(962) Net borrowings at the 79 361 (1,506) (1,066) (962)
beginning of the
period
59 Increase in cash 13 - - 13 9
(297) Decrease in short - (180) - (180) (143)
term investments
202 (Increase)/decrease - - (134) (134) (50)
in borrowings
(36) Change in net 13 (180) (134) (301) (184)
borrowings resulting
from cash flows
(11) Inception of finance - - - - (5)
leases
(57) Exchange translation 2 3 (119) (114) (96)
differences
(1,066) Net borrowings at the 94 184 (1,759) (1,481) (1,247)
end of the period
Year
ended 31 Six months
December Short term ended 30 June
1999 Cash investments Borrowings 2000 1999
Euro m Euro m Euro m Euro m Euro m Euro m
(1,366) Net borrowings at the 127 581 (2,425) (1,717) (1,366)
beginning of the
period
90 Increase in cash 21 - - 21 13
(451) Decrease in short - (293) - (293) (213)
term investments
308 (Increase)/decrease - - (219) (219) (75)
in borrowings
(53) Change in net 21 (293) (219) (491) (275)
borrowings resulting
from cash flows
(17) Inception of finance - - - - (7)
leases
(281) Exchange translation 1 3 (136) (132) (247)
differences
(1,717) Net borrowings at the 149 291 (2,780) (2,340) (1,895)
end of the period
6 ADJUSTED FIGURES
Adjusted profit and cash flow figures are used by the Reed Elsevier businesses
as additional performance measures. The adjusted figures are derived as
follows:
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
180 274 Operating profit 169 182 275 270
including joint
ventures
Adjustments:
373 567 Amortisation of 192 181 313 270
goodwill and
intangible assets
161 244 Reorganisation costs 27 - 44 -
28 43 Acquisition related 6 10 10 15
integration costs
50 76 Year 2000 compliance - 35 - 52
costs
792 1,204 Adjusted operating 394 408 642 607
profit
105 160 Profit before tax 192 145 313 215
Adjustments:
373 567 Amortisation of 192 181 313 270
goodwill and
intangible assets
161 244 Reorganisation costs 27 - 44 -
28 43 Acquisition related 6 10 10 15
integration costs
50 76 Year 2000 compliance - 35 - 52
costs
(7) (11)Net profit on sale of (66) - (108) -
fixed asset investments
710 1,079 Adjusted profit 351 371 572 552
before tax
(63) (95)Profit/(loss) 102 68 167 101
attributable to
parent companies'
shareholders
Adjustments:
373 567 Amortisation of 192 181 313 270
goodwill and
intangible assets
161 244 Reorganisation costs 25 - 41 -
22 33 Acquisition related 4 10 7 15
integration costs
41 63 Year 2000 compliance - 17 - 25
costs
(7) (11)Net profit on sale of (63) - (104) -
fixed asset investments
527 801 Adjusted profit 260 276 424 411
attributable to parent
companies' shareholders
760 1,155 Net cash inflow from 294 242 479 361
operating activities
4 6 Dividends received from 5 2 8 3
joint ventures
(137) (208)Purchase of tangible (52) (71) (85) (106)
fixed assets
15 23 Proceeds from sale of 6 4 10 6
fixed assets
138 210 Payments in relation to 53 67 87 99
exceptional items
charged to operating
profit
780 1,186 Adjusted operating 306 244 499 363
cash flow
7 POST BALANCE SHEET EVENT
On 25 July 2000, Reed Elsevier entered into a definitive agreement to acquire
the businesses comprising Miller Freeman Europe for £360m/Euro585m. The
businesses will be integrated principally within Reed Exhibition Companies.
REED INTERNATIONAL P.L.C
SUMMARY FINANCIAL INFORMATION
Consolidated profit and loss account
Year
ended 31
December Six months ended 30 June
1999 2000 1999
£m £m £m
1,793 Share of turnover of joint ventures 950 897
(1) Operating loss (before joint ventures)
Share of operating profit of joint ventures:
414 Before amortisation and exceptional items 207 213
(323) Amortisation and exceptional items (119) (120)
90 Operating profit including joint ventures 88 93
4 Share of non operating exceptional items 35 -
of joint ventures
(43) Net interest (23) (20)
(including share of joint ventures)
51 Profit on ordinary activities before 100 73
taxation
(90) Tax on profit on ordinary activities (48) (40)
5 UK corporation tax (2) -
(95) Share of tax of joint ventures (46) (40)
(39) Profit/(loss) attributable to ordinary 52 33
shareholders
(116) Dividends paid and proposed (34) (53)
(155) Retained profit/(loss) taken to reserves 18 (20)
(3.4)p Basic earnings/(loss) per share 4.5p 2.9p
(3.4)p Diluted earnings/(loss) per share 4.5p 2.9p
24.4 p Adjusted earnings per share 12.0p 12.8p
Adjusted earnings per share is based upon the Reed International shareholders'
52.9% economic interest in the adjusted profit attributable of the Reed
Elsevier combined businesses.
Dividends
The directors of Reed International have declared an interim dividend of 3.1p
(1999 interim: 4.6p). In 1999 the full year dividend was 10.0p.
Cash flows
The cash flows of Reed International primarily comprise dividends received
from Reed Elsevier plc and dividends paid to Reed International shareholders.
Consolidated balance sheet
As at 31
December As at 30 June
1999 2000 1999
£m £m £m
857 Fixed asset investment in joint ventures 888 1,015
Current assets
233 Debtors 235 229
(73) Creditors: amounts falling due within one year (45) (68)
160 Net current assets 190 161
1,017 Total assets less current liabilities 1,078 1,176
(36) Creditors: amounts falling due after (36) (36)
more than one year
981 Shareholders' funds 1,042 1,140
Approved by the Board of Directors, 8 August 2000.
Basis of preparation
The Reed International share of the Reed Elsevier combined results has been
calculated on the basis of the 52.9% economic interest of the Reed
International shareholders in the Reed Elsevier combined businesses, after
taking account of results arising in Reed International and its subsidiary
undertakings. Reed International's 52.9% economic interest in the net assets
of the combined businesses has been shown in the balance sheet as interests in
joint ventures, net of the assets and liabilities reported as part of Reed
International and its subsidiary undertakings.
The interim figures for the six months ended 30 June 2000 and the comparative
amounts to 30 June 1999 are unaudited but have been reviewed by the auditors
and their report to the Board of Reed International is set out below. The
financial information for the year ended 31 December 1999 has been abridged
from the financial statements for that year, which have been filed with the UK
Registrar of Companies and received an unqualified audit report.
ELSEVIER NV
SUMMARY FINANCIAL INFORMATION
Profit and loss account
Year
ended 31
December Six months ended 30 June
1999 2000 1999
Euro m Euro m Euro m
2,577 Share of turnover of joint ventures 1,463 1,262
(5) Operating loss (before joint ventures) (1) (3)
Share of operating profit of joint ventures:
608 Before amortisation and exceptional items 323 307
(466) Amortisation and exceptional items (184) (168)
137 Operating profit including joint ventures 138 136
6 Share of non operating exceptional items 54 -
of joint ventures
(63) Net interest (35) (28)
(including share of joint ventures)
80 Profit on ordinary activities before 157 108
taxation
(128) Share of tax of joint ventures (73) (57)
(48) Profit/(loss) attributable to ordinary 84 51
shareholders
(179) Dividends paid and proposed (55) (79)
(227) Retained profit/(loss) taken to reserves 29 (28)
Euro (0.07) Basic earnings/(loss) per share Euro 0.12 Euro 0.07
Euro (0.07) Diluted earnings/(loss) per share Euro 0.12 Euro 0.07
Euro 0.57 Adjusted earnings per share Euro 0.30 Euro 0.29
Adjusted earnings per share is based upon the Elsevier shareholders' 50% share
of the adjusted profit attributable of the Reed Elsevier combined businesses.
Dividends
The directors of Elsevier have proposed an interim dividend of Euro 0.09 (1999
interim: Euro 0.12). In 1999 the full year dividend was Euro 0.27.
Cash flows
The cash flows of Elsevier primarily comprise dividends received from Reed
Elsevier plc group and dividends paid to Elsevier shareholders.
Balance sheet
As at
31 December As at 30 June
1999 2000 1999
Euro m Euro m Euro m
1,559 Financial fixed assets 1,583 1,692
61 Accounts receivable 61 64
19 Short term investments 14 16
80 Current assets 75 80
(102) Current liabilities (57) (82)
(22) Net working capital 18 (2)
(8) Long term liabilities (8) (11)
(36) Provisions (36) (36)
1,493 Shareholders' funds 1,557 1,643
Signed by the Boards of Directors, 8 August 2000.
Basis of preparation
The results for the six months ended 30 June 2000 reflect Elsevier's 50% share
of the Reed Elsevier combined businesses, accounted for on an equity basis.
The interim figures for the six months ended 30 June 2000 and the comparative
amounts to 30 June 1999 are unaudited but have been reviewed by the auditors
and their report to the Boards of Elsevier is set out below. The financial
information for the year ended 31 December 1999 has been abridged from the
statutory accounts of Elsevier for that year and the auditors, Deloitte &
Touche, have confirmed that their opinion on those accounts was unqualified.
ADDITIONAL INFORMATION FOR US INVESTORS
Summary Combined Financial Information in US Dollars
Highlights of the Reed Elsevier combined financial information in US dollars
are given below. This is a simple translation into US dollars at stated rates
of exchange (see note 2 to the combined financial information) and does not
represent a restatement under US GAAP.
Year
ended 31
December Six months ended 30 June Change %
1999 2000 1999
US$m US$m US$m
5,492 Net sales 2,818 2,748 +3
1,283 Adjusted operating profit 619 661 -6
1,150 Adjusted profit before tax 551 601 -8
854 Adjusted profit attributable 408 447 -9
1,263 Adjusted operating cash flow 480 395 +22
$ Adjusted earnings per American $ $
Depositary Share (ADS)
1.58 Reed International (Each ADS 0.75 0.83 -9
comprises four ordinary shares)0.58 0.63 -8
1.22 Elsevier (Each ADS comprises
two ordinary shares)
As at 31
December As at 30 June
1999 2000 1999
US$m US$m US$m
5,508 Goodwill and intangible assets 5,887 5,716
3,033 Other assets 2,704 3,140
8,541 Total assets 8,591 8,856
2,440 Borrowings 2,674 2,848
3,096 Other liabilities 2,923 2,625
3,005 Combined shareholders' funds 2,994 3,383
8,541 Total liabilities and shareholders' funds 8,591 8,856
Summary of the Principal Differences between UK and Dutch GAAP and US GAAP
The combined financial information has been prepared in accordance with UK and
Dutch GAAP, which differ in certain significant respects from US GAAP. The
principal differences that affect net income and combined shareholders' funds
relate to the capitalisation and amortisation of goodwill and other
intangibles, pensions and related deferred tax effects. A more complete
explanation of the accounting policies used by the Reed Elsevier combined
businesses and the differences between UK and Dutch GAAP and US GAAP is set
out in the Reed Elsevier Annual Reports & Financial Statements 1999.
The effects on net income and combined shareholders' funds of material
differences between UK and Dutch GAAP and US GAAP are set out below:
Year ended Six months Six months
31 December ended 30 June ended 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
(63) (95) Net income under UK and 102 68 167 101
Dutch GAAP
US GAAP adjustments:
(83) (126) Amortisation of goodwill (46) (38) (75) (57)
and other intangibles
67 101 Deferred taxation 40 20 65 30
6 9 Pensions 7 1 11 2
- - Other items 3 - 5 -
(73) (111) Net income under US GAAP 106 51 173 76
As at
31 December As at 30 June As at 30 June
1999 1999 2000 1999 2000 1999
£m Euro m £m £m Euro m Euro m
1,855 2,987 Combined shareholders' 1,970 2,155 3,113 3,276
funds under UK and
Dutch GAAP
US GAAP adjustments:
553 890 Goodwill and other 581 612 918 930
intangibles
(180) (290) Deferred taxation (196) (230) (310) (350)
63 102 Pensions 70 58 111 88
5 8 Other items 10 4 16 6
127 204 Ordinary dividends not 68 107 107 163
declared in the period
2,423 3,901 Combined shareholders' 2,503 2,706 3,955 4,113
funds under US GAAP
Independent review report to the Directors of Reed International P.L.C. and to
the Members of the Supervisory and Executive Boards of Elsevier NV
Introduction
On the instruction of the Boards of Reed International P.L.C. and Elsevier NV,
we have reviewed the combined financial information of Reed International
P.L.C., Elsevier NV, Reed Elsevier plc and Elsevier Reed Finance BV and their
respective subsidiaries (together 'the combined businesses') and the financial
information of Reed International P.L.C. and Elsevier NV for the six months
ended 30 June 2000 set out on pages 9 to 17, and we have read the other
information contained in the Reed Elsevier Interim Statement and considered
whether it contains any apparent misstatement or material inconsistencies with
the financial information.
Directors' responsibilities
The Reed Elsevier Interim Statement, including the financial information
contained therein, is the responsibility of, and has been approved by, the
Directors of Reed International P.L.C. and Elsevier NV. The Listings Rules of
the UK Financial Services Authority and Generally Accepted Accounting
Principles in the UK and the Netherlands require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the UK Auditing Practices Board. A review consists
principally of making enquiries of the managements of the Reed Elsevier
combined businesses and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing
whether accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests
of controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
Auditing Standards and therefore provides a lower level of assurance than an
audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2000.
Deloitte & Touche Deloitte & Touche
Chartered Accountants Accountants
London Amsterdam
8 August 2000 8 August 2000
FINANCIAL DIARY FOR 2000
9 August Announcement of Interim Results for the six months to 30 June 2000
14 August Ordinary shares and ADSs in Elsevier NV go ex-dividend for interim
dividend
16 August Record date - ADSs in Elsevier NV
21 August Ordinary shares and ADSs in Reed International P.L.C. go
ex-dividend for interim dividend
23 August Record date - ADSs in Reed International P.L.C.
25 August Record date - Reed International P.L.C. ordinary shares
18 SeptemberInterim dividends for 2000 paid on Reed International P.L.C. and
Elsevier NV ordinary shares
25 SeptemberInterim dividends for 2000 paid on Reed International P.L.C. and
Elsevier NV ADSs
7 December Trading Update issued in relation to the 2000 financial year
FINANCIAL DIARY FOR 2001
22 February Announcement of Preliminary Results for the year ended 31 December
2000
10 April Reed International P.L.C. Annual General Meeting
11 April Elsevier NV Annual General Meeting
9 August Announcement of Interim Results for the six months to 30 June 2001
AUDITORS
Deloitte & Touche Deloitte & Touche
Hill House, 1 Little New Street Orlyplein 50
London EC4A 3TR, United Kingdom 1043 DP Amsterdam, The Netherlands
I. STOCKBROKERS
Cazenove & Co BN AMRO Bank NV
12 Tokenhouse Yard Gustav Mahlerlaan 10
London EC2R 7AN, United Kingdom 1082 PP Amsterdam, The Netherlands
I. ADR DEPOSITARY
Citibank NA
111 Wall Street,
New York, NY 10043, USA
Reed International P.L.C. Elsevier NV
CUSIP No. 758212872 CUSIP No.290259100
(Trading Symbol: RUK) (Trading Symbol: ENL)
STOCK EXCHANGE QUOTATIONS
Reed International P.L.C. shares and Elsevier NV shares are quoted on the
stock exchanges in Amsterdam, London and New York. In addition, Elsevier
shares are quoted on the EBS stock exchange in Switzerland and are also traded
in the Freiverkehrsmarkt in Frankfurt.
Trading on the New York Stock Exchange is in the form of American Depositary
Shares (ADSs), evidenced by American Depositary Receipts (ADRs). Each Elsevier
ADS represents two Elsevier shares and each Reed International ADS represents
four Reed International shares. Enquiries concerning Reed International or
Elsevier ADSs should be addressed to Citibank Shareholder Services, PO Box
2502, Jersey City, NJ 07303 2502 or by telephoning +1 877 248 4237 (toll free
if dialled from within the United States).
This statement is being mailed to shareholders of Reed International P.L.C. on
9 August 2000 and will be available to the shareholders of Elsevier NV upon
request. Copies are available to the public from the registered offices of the
respective companies.
Reed International P.L.C. Elsevier NV
25 Victoria Street Van de Sande Bakhuyzenstraat 4
London, SW1H 0EX, United Kingdom 1061 AG Amsterdam, The Netherlands
Tel: +44 (0) 20 7222 8420 Tel: +31 20 515 9257
Fax: +44 (0) 20 7227 5799 Fax: +31 20 618 0325
For further information or contact details, please consult our website:
www.reedelsevier.com
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