Reed Elsevier www.reedelsevier.com INDISPENSABLE GLOBAL INFORMATION Reed Elsevier ANNUAL REPORT 2003 ON FORM 20-F ANNUAL REPORT 2003 ON FORM 20-F ANNUAL REPORT 2003 ON FORM FORM 20-F SCIENCE & MEDICAL LEGAL EDUCATION BUSINESS LIFE SCIENCES > NEUROSCIENCE > STATUTES > CASE LAW > ELEMENTARY > SECONDARY > AEROSPACE > COMMUNICATIONS > CHEMISTRY > MATHEMATICS > COMMENTARIES > CITATIONS > TAX SUPPLEMENTAL > ASSESSMENT > MEDIA AND ENTERTAINMENT > IT > PHYSICS > DECISION SCIENCES > INFORMATION> DIRECTORIES > COURT E-LEARNING > PROFESSIONAL BUILDING AND CONSTRUCTION > SOCIAL AND BEHAVIOURAL SCIENCES > RECORDS > LEGAL DISCOVERY > DEVELOPMENT > TEACHING LOGISTICS AND DISTRIBUTION > MEDICINE > NURSING > DENTISTRY > BUSINESS INFORMATION> RISK SUPPORT > LIBRARY MATERIALS > SOCIAL CARE > SPORT AND LEISURE > VETERINARY SCIENCE SOLUTIONS > CONGRESSIONAL CLINICAL TESTING FOOD AND HOSPITALITY > INFORMATION AGRICULTURE > MANUFACTURING As ¢led with the Securities and Exchange Commission on March 15, 2004 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) [] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 or [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ¢scal year ended December 31, 2003 or [] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission ¢le number: 1-3334 REED ELSEVIER PLC REED ELSEVIER NV (Exact name of Registrant as speci¢ed in its charter) (Exact name of Registrant as speci¢ed in its charter) England The Netherlands (Jurisdiction of incorporation or organisation) (Jurisdiction of incorporation or organisation) 1-3 Strand Sara Burgerhartstraat 25 London WC2N 5JR 1055 KV Amsterdam England The Netherlands (Address of principal executive o⁄ces) (Address of principal executive o⁄ces) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered Reed Elsevier PLC: American Depositary Shares (each representing four Reed Elsevier PLC ordinary shares) New York Stock Exchange Ordinary shares of 12.5p each (the ‘‘Reed Elsevier PLC ordinary shares’’) New York Stock Exchange* Reed Elsevier NV: American Depositary Shares (each representing two Reed Elsevier NV ordinary shares) New York Stock Exchange Ordinary shares of k0.06 each (the ‘‘Reed Elsevier NV ordinary shares’’) New York Stock Exchange* * Listed, not for trading, but only in connection with the listing of the applicable Registrant’s American Depositary Shares issued in respect thereof. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuers’ classes of capital or common stock as of December 31, 2003: Title of each class Reed Elsevier PLC: Number of outstanding shares Ordinary shares of 12.5p each ......................................................................................................................... 1,271,111,509 Reed Elsevier NV: Ordinary shares of k0.06 each.......................................................................................................................... 738,760,906 R-shares of k0.60 each (held by a subsidiary of Reed Elsevier PLC)................................................................. 4,679,249 Indicate by check mark whether the registrants (1) have ¢led all reports required to be ¢led by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ¢le such reports), and (2) have been subject to such ¢ling requirements for the past 90 days: Yes [X] No [ ] Indicate by check mark which ¢nancial statement item the registrants have elected to follow: Item 17 [ ] Item 18 [X] TABLE OF CONTENTS Page GENERAL................................................................................................................................................................... 1 SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS.............................................................. 2 PART I ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS..................... N/A ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLE........................................................ N/A ITEM 3: KEY INFORMATION ........................................................................................................... 3 Selected ¢nancial data........................................................................................................... 3 Risk factors........................................................................................................................... 9 ITEM 4: INFORMATION ON REED ELSEVIER............................................................................... 11 History and development ...................................................................................................... 11 Business overview ................................................................................................................. 12 Organisational structure ....................................................................................................... 20 Property, plants and equipment............................................................................................. 21 ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS ......................................... 22 Operating results ö Reed Elsevier ........................................................................................ 22 Liquidity and capital resources ö Reed Elsevier ................................................................... 33 Operating results ö Reed Elsevier PLC and Reed Elsevier NV ............................................. 35 Trend information ................................................................................................................36 ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES .......................................... 37 Directors............................................................................................................................... 37 Senior management............................................................................................................... 39 Compensation....................................................................................................................... 39 Board practices ..................................................................................................................... 44 Employees ............................................................................................................................ 46 Share ownership.................................................................................................................... 47 ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS......................... 55 Major shareholders...............................................................................................................55 Related party transactions .................................................................................................... 55 ITEM 8: FINANCIAL INFORMATION ............................................................................................. 56 ITEM 9: THE OFFER AND LISTING ................................................................................................. 57 Trading markets.................................................................................................................... 57 ITEM 10: ADDITIONAL INFORMATION .......................................................................................... 59 Memorandum and articles of association .............................................................................. 59 Material contracts................................................................................................................. 60 Exchange controls................................................................................................................. 60 Taxation ............................................................................................................................... 60 Documents on display........................................................................................................... 62 Page ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........ 63 ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES........................ N/A PART II ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ................................ N/A ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS .............................................................................................................. N/A ITEM 15: CONTROLS AND PROCEDURES ....................................................................................... 65 ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT..................................................................... 67 ITEM 16B: CODES OF ETHICS ............................................................................................................... 67 ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES......................................................... 67 PART III ITEM 17: FINANCIAL STATEMENTS*..............................................................................................