Final Results - Part 1

Reed International PLC
22 February 2001

PART 1

2/01 ISSUED ON BEHALF OF REED INTERNATIONAL P.L.C. AND        22 FEBRUARY 2001
     ELSEVIER NV                                               

 REED ELSEVIER: HIGHLIGHTS OF 2000 PRELIMINARY RESULTS

YEAR OF REAL PROGRESS ON EXECUTION OF STRATEGY

-   2000 results ahead of expectations, with momentum growing
-   Revenues up 9%, adjusted pre-tax profit lower by 3% (constant rates).
    Underlying revenue up 5%, versus 3% in 1999
-   New management team in place
-   Successful execution of major investment and cost saving programmes
-   £1bn/Euro1.6bn of acquisitions completed, to accelerate growth
-   Target of above market revenue growth and double-digit earnings growth by
    2002 firmly on track


Reed Elsevier                                                         Change at
                                                                       Constant
                                       2000   1999     2000     1999 currencies
                                         £m     £m    Eurom    Eurom          %
Turnover                              3,768  3,390    6,180    5,153         9%
Adjusted profit before                  690    710    1,132    1,079       (3)%
taxation

Parent companies               Reed International            Elsevier
                                            Change                       Change
                                2000   1999      %     2000     1999          %
Adjusted earnings per share    23.3p  24.4p   (5)% Euro0.59 Euro0.57         4%
Dividend per share             10.0p  10.0p      - Euro0.28 Euro0.27         4%





Crispin Davis, Chief Executive Officer of Reed Elsevier, commented:



We are very encouraged by the progress made over the last year in reshaping
and reinvigorating the business. There is more to do,  and the priority
remains on execution and delivery.  2001 should see Reed Elsevier move very
significantly towards our stated goal of above market revenue growth and
double-digit earnings growth in 2002  and beyond.




Enquiries      London/Amsterdam                      New York
               Sybella Stanley                       Paul Richardson

               [phone]                      [phone]

               Catherine May (Media)
               [phone]





FINANCIAL HIGHLIGHTS

FOR THE YEAR ENDED 31 DECEMBER 2000

Reed Elsevier combined businesses
                                                                      Change at
                                                                       constant
                                  2000   1999       2000       1999  currencies
                                    £m     £m      Eurom      Eurom           %
Reported figures

Turnover                         3,768  3,390      6,180      5,153          9%
Operating profit                   210    180        344        274         28%
Profit before taxation             192    105        315        160        106%
Net borrowings                     433  1,066        697      1,717
Adjusted figures

Operating profit                   793    792      1,301      1,204        (1)%
Operating margin                   21%    23%        21%        23%
Profit before taxation             690    710      1,132      1,079        (3)%
Operating cash flow                775    780      1,271      1,186        (1)%
Operating cash flow conversion     98%    98%        98%        98%
Interest cover (times)               8     10          8         10



The Reed Elsevier combined financial statements encompass the businesses of
Reed Elsevier plc and Elsevier Reed Finance BV, together with their parent
companies, Reed International and Elsevier (the 'Reed Elsevier combined
businesses').



Adjusted figures, which exclude the amortisation of goodwill and intangible
assets, exceptional items and related tax effects, are presented as additional
performance measures.



The percentage change at constant currencies refers to the movements at
constant exchange rates, using 1999 full year average rates.





Parent companies

                                 Reed International           Elsevier
                                  2000   1999      %     2000       1999      %
                                    £m     £m change   Euro m     Euro m change
Reported profit/(loss)              11   (39)              27       (48)
attributable
Adjusted profit attributable       270    279   (3)%      419        401     4%
Average exchange rate Euro:£      1.64   1.52            1.64       1.52
Reported earnings/(loss) per      1.0p (3.4)p        Euro0.04  Euro(0.07)
share
Adjusted earnings per share      23.3p  24.4p   (5)% Euro0.59   Euro0.57     4%
Dividend per share               10.0p  10.0p      - Euro0.28   Euro0.27     4%



The results of Reed International reflect its shareholders' 52.9% economic
interest in the Reed Elsevier combined businesses. The results of Elsevier
reflect its shareholders' 50% economic interest in the Reed Elsevier combined
businesses. The respective economic interests of the Reed International and
Elsevier shareholders take account of Reed International's economic interest
in Elsevier.





REPORT OF THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER

2000 has seen significant progress in the transformation of Reed Elsevier.  A
year ago we put in place a comprehensive new strategy to deliver sustained and
accelerated growth.  We are pleased to report real progress against all the
key milestones of its detailed execution.  As a result, we are now seeing a
strengthening momentum across Reed Elsevier, confirming the core qualities of
the business.

The results for 2000 are ahead of our expectations on both revenue and profit
with performance improving as the year progressed.  Almost all of our
businesses have exceeded objectives.  A year ago, we set a target for 2002 and
beyond of revenue growth ahead of the market, and of double-digit earnings
growth.  There is still a lot to be done, but we are firmly on track to
deliver.

In October 2000, we were pleased to announce that agreements had been reached
to acquire Harcourt General, Inc's Scientific and Medical business and US
Schools Education and Testing businesses in a $4.5 billion transaction.  The
acquisition will give Reed Elsevier a high quality leading position across the
Scientific, Technical and Medical spectrum, and an excellent position in the
fast growing US schools education market.  It will further accelerate our
revenue and profit growth.

FINANCIAL RESULTS

Overall 2000 revenue was up 9% at constant exchange rates with adjusted
pre-tax profits 3% lower.  In reported currencies, revenues were up 11% to £
3,768m and 20% to Euro6,180m whilst adjusted pre-tax profits were lower by 3%
to £690m/up 5% to Euro1,132m.  Excluding acquisitions and disposals and
currency translation, underlying revenue growth was up 5%.  The second half
continued the improving trend seen in the first, benefiting from the positive
impact of the investment programme.  Underlying operating profits were 2%
lower reflecting this investment mitigated by the cost savings programme.
Cash flow conversion was strong with operating cash flow at £775m/Euro1,271m,
representing 98% of adjusted operating profits.

The Science & Medical business had a good year with stronger subscription
renewals and the continuing market success of the ScienceDirect series of
online products.  Revenues and operating profits increased by 7% and 12%
respectively at constant exchange rates, or 8% and 12% excluding acquisitions
and disposals.  ScienceDirect now covers over 45% of subscription revenues, up
from 25% a year ago, and usage is growing rapidly.  New functionalities and
customised web services for specific user groups have been introduced.
Particularly pleasing is the strengthening trend in subscription renewals.

The Legal business increased revenues by 5% whereas operating profits were 19%
lower at constant exchange rate reflecting the significant step up in new
product and marketing initiatives.  Excluding acquisitions and disposals, the
figures were 3% and 19% respectively.  Substantial progress has been made in
the three year programme to transform LEXIS-NEXIS' competitive position, and
revenue trends have started to turnaround with continuing improvement seen in
the second half of the year as new web based legal and business research
services and practice tools were launched.  In US Legal Markets, online
revenues grew 5%, although this is largely offset by lower print and CD-ROM
sales as business migrates online.  In US Corporate and Federal Markets, Nexis
online revenues grew 4% which compares with a decline of 4% in the previous
year.  In US law schools, lexis.com achieved parity in student preference by
the end of the year, a substantial improvement on the position a year ago, and
a clear testatment to the progress made in product and marketing.  In
International Markets outside the US, the legal businesses continued to
perform satisfactorily.

The Education business saw revenues and operating profits up 9% and 15%
respectively, with a particularly strong contribution from the US schools
supplemental business which grew sales by 37%.  The Education business is now
reported separately from the Legal segment in anticipation of the acquisition
of Harcourt.

The Business segment also performed well with revenues and operating profits
increased respectively by 12% and 7% at constant exchange rates.  Underlying
revenue growth at 4% was held back by unfavourable cycling of non-annual
exhibitions and lower revenue in travel businesses being sold.  Improved
market conditions and product and sales initiatives otherwise delivered a
strong trading performance.  Underlying operating profits were ahead 3% with
the impact of substantial new investment largely offset by savings in core
costs.

Cahners saw turnover and operating profits up 5% and 30% respectively before
acquisitions with strong performances across a number of sectors and a growing
contribution from new product launches.  The revenue growth and the benefit of
the major cost restructuring programme boosted profitability despite the
substantial increase in investment.  Internet portals were launched in over 20
sectors and although the market opportunities are now considered somewhat
smaller than originally thought, they are doing well in their markets with
traffic and revenues growing.  The UK and European businesses saw good sales
growth with buoyant market conditions and the impact of product launches and
market initiatives.  Underlying profits were lower at Reed Business
Information, reflecting the major increase in investment, particularly in
totaljobs.com, the online recruitment service which commands the leading
market share in the UK.  For Reed Exhibitions, 2000 was a year when a number
of important non-annual shows do not take place.  Annual shows however
performed well, particularly in Europe and Asia Pacific, and investment was
made in a strong successful launch programme of 35 shows.

Acquisitions and disposals were 2% dilutive to adjusted earnings as investment
was made in the high growth businesses acquired and sale proceeds at lower
multiples reflected the lower growth of businesses sold.  These transactions,
together with the disposals in hand, will make the business more focused in
higher quality sectors and will accelerate further revenue and profit growth.

Reported pre-tax profits, after exceptional items and amortisation of goodwill
and intangible assets, were £192m/Euro315m compared with £105m/Euro160m in
1999, reflecting the impact of exceptional items.

PROGRESS OF STRATEGY

Throughout the last year we have been executing the strategy for growth that
we announced last February and we are pleased to report that we have achieved
virtually all of our objectives to date.

Significant upgrade of management and organisation effectiveness

Strong new appointments have been made to senior management positions.  These
include the Global CEOs for Science & Medical, Legal and Business; new CEOs
for Cahners and the LEXIS-NEXIS operating businesses; a new Group Technology
Officer, HR Director and General Counsel.  Internet activities have been
separately organised within each business with clear leadership and
accountabilities.  The head office has been reduced.  Executive management
development programmes and new incentive structures have been introduced.

Major upgrade of products, leveraging Internet technology, to deliver superior
services to customers

New and upgraded products have been developed and launched, based on in-depth
customer research; the focus is on higher value added content and services,
Internet delivered, with greater ease of use and functionality, and increasing
customisation.  The ScienceDirect web service has been successfully rolled
out.  Further significant improvements have been made to content and
functionality.  Over 45% of scientific research subscriptions is now internet
delivered.  The web enabled LEXIS-NEXIS information services, through
lexis.com and nexis.com, have been well received in the US legal and corporate
markets, and have significantly improved competitiveness.

Internet portals have been built, launched and expanded around core Business
sectors internationally.  5 major portals have been launched in the US in the
electronics, manufacturing and media sectors and 15 more using the e:Logic
platform.  The portals are well positioned in their markets with traffic and
advertising revenues growing. The new and upgraded Internet portals in Europe
are doing particularly well in their target markets.

More effective marketing and sales programmes

Customer research has been expanded across the business.  Marketing programmes
have been redeveloped.  Sales forces have been significantly increased, most
particularly in Science & Medical and Legal.  In Science & Medical, the sales
force and customer service activities have been doubled.  In Legal, the sales
force and marketing programmes for small law firms and US law schools in
particular have been substantially expanded.  Competitive parity has been
re-established in law schools, confirmed by independent research; an important
milestone since this is where product preferences are first formed.

Significant increase in investment - largely against Internet - to drive
revenue growth

The investment programme for 2000 has been very successful in this dramatic
upgrading of our products and of our marketing and sales activities, and in
reigniting creativity and innovation across the organisation.  Budgeted at £
260m/Euro420m, actual spend in 2000 was £10m/Euro16m higher.  This level of
investment can be expected to increase as successes are built upon.  An
additional £20m/Euro32m is budgeted in 2001, with increases in Science &
Medical and Legal and a modest reduction in Business.

Aggressive cost saving programmes

Cost savings of £143m/Euro235m have been achieved in 2000, £13m/Euro21m ahead
of plan.  These have been derived principally from non-revenue generating
areas, e.g. production, infrastructure and support staff.  We remain on track
to deliver the full £170m/Euro278m of targeted savings in 2001.

Expand geographically to build global capability and leadership position

We have extended and strengthened our position in global markets through
acquisition and launch.  In Science & Medical, ScienceDirect is now a fully
global product.  Within Legal, businesses have been acquired in the US, UK,
Asia and Latin America. Global content, technology and branding strategies
have been developed.  In Business, acquisitions have been made to fill out our
presence in the global chemicals and construction sectors.  Exhibitions
businesses have been acquired in continental Europe.

Continue to target acquisitions/alliances to accelerate achievement of
strategic goals

We completed over 50 acquisitions, totalling £952m/Euro1,562m including CMD
Group (construction information), e:Logic (application service provider),
Miller Freeman Europe (exhibitions) and legal publishing businesses
internationally.  These have expanded our global capability and leadership
position across target markets.  Together with the disposal of non core
businesses, they are focused on accelerating growth and are performing to our
expectation.  Alliances have been formed to enhance the scope and penetration
of our Internet services.   Reed Elsevier Ventures has been launched to
participate in emerging businesses that present strategically and financially
attractive opportunities.

A more detailed review of progress by business is included in the Review of
Operations.

ACQUISITION OF HARCOURT GENERAL STM AND EDUCATION BUSINESSES

The acquisition of Harcourt General's Science, Technical and Medical (STM)
business and its US Schools Education and Testing businesses represents a
major step forward in our strategy.  The acquisition will give Reed Elsevier a
leading position across the Scientific, Technical and Medical spectrum, and an
excellent position in the fast growing US Schools education market.  The very
positive performance of these businesses reported by Harcourt for the year to
October 2000 and our meetings with management and staff have reaffirmed our
high expectations.

The acquisition, which is subject to the normal regulatory processes, will be
effected by the purchase of the whole of Harcourt General, Inc and the onsale
to The Thomson Corporation of the Higher Education business and certain
Corporate and Professional Services businesses that we do not wish to retain.
The total cost of the transaction, after taking into account the onsale and
debt assumed and other liabilities, will be approximately $4.5 billion.

To finance the acquisition, in November 2000, Reed International and Elsevier
raised £1,263m/Euro2,071m through the issue of new shares representing an
additional 9.9% of their respective ordinary share capitals.  The remainder of
the transaction cost will be funded from available debt facilities.

PARENT COMPANY EARNINGS AND DIVIDENDS

For the parent companies, Reed International and Elsevier, the adjusted
earnings per share were 5% lower at 23.3p and up 4% at Euro0.59 respectively.
At constant exchange rates, this represents a reduction of 5%.  The reported
earnings per share, including exceptional items and the amortisation of
goodwill and intangible assets, was for Reed International shareholders 1.0p
(1999 loss 3.4p) and for Elsevier shareholders Euro0.04 (1999 loss Euro0.07).

The proposed Reed International final dividend is 6.9p per share, which
together with the interim dividend 2000 of 3.1p gives a total 2000 dividend of
10.0p, unchanged from the prior year.  As announced in February 2000, the 2000
interim dividend was reduced by one-third and the proposed final dividend
adjusted upwards correspondingly to restore normal proportions between the
interim and final dividends following the dividend reduction in 1999. The
Elsevier 2000 final dividend under the equalisation arrangements is Euro0.19
per share. Together with the interim dividend of Euro0.09, the 2000 total
Elsevier dividend will be Euro0.28, up 4%. The differences in dividend growth
between Reed International and Elsevier reflect the impact of currency
movements.

OUTLOOK

We are very encouraged by the progress made over the last year in reshaping
and reinvigorating the business, with the focus on leadership, superior
products and growth.  There is more to do, and the priority now is even more
firmly on execution and delivery.  2001 should see Reed Elsevier move very
significantly towards our stated goal of above market revenue growth and
double-digit earnings growth in 2002 and beyond.  The acquisition of Harcourt
will add meaningfully over and above that progress.  Whilst the slowing US
economy will have some impact on our Business to Business operations, we
believe this to be manageable.  The Science & Medical, Legal and Education
businesses should be largely unaffected.

With a clear strategy in place, a well-motivated organisation, and total focus
on execution and delivery, Reed Elsevier is well placed to accelerate momentum
and capitalise on the significant underlying strengths of the business.

Morris Tabaksblat                 Crispin Davis
Chairman                          Chief Executive Officer

REVIEW OF OPERATIONS AND FINANCIAL PERFORMANCE

REVIEW OF OPERATIONS
                                                                       % change
                             2000   1999    2000       1999         at constant
                               £m     £m   Euro m    Euro m          currencies
Turnover

Science & Medical             693    652   1,137        991                  7%
Legal                       1,201  1,087   1,970      1,652                  5%
Education                     202    181     331        275                  9%
Business                    1,672  1,470   2,742      2,235                 12%
Total                       3,768  3,390   6,180      5,153                  9%

Adjusted operating profit

Science & Medical             252    231     413        351                 12%
Legal                         237    282     389        428               (19)%
Education                      40     34      66         52                 15%
Business                      264    245     433        373                  7%
Total                         793    792   1,301      1,204                (1)%



Unless otherwise indicated, all percentage movements in the following
commentary refer to constant currency rates, using 1999 full year average
rates, and are stated before amortisation of goodwill and intangible assets
and exceptional items. The Education business, previously reported within the
Legal segment, has been presented separately for the first time in 2000.
Comparatives have been restated accordingly.


SCIENCE & MEDICAL
                                                                       % change
                             2000   1999    2000       1999         at constant
                               £m     £m   Eurom      Eurom          currencies
Turnover

Elsevier Science              592    534     971        812                 12%
Medical Businesses            101    118     166        179               (15)%
                              693    652   1,137        991                  7%
Adjusted operating profit     252    231     413        351                 12%
Operating margin            36.4%  35.4%   36.4%      35.4%             1.0 pts

2000 has been a very successful year for Elsevier Science. Our results have
demonstrated the good growth momentum in the business and we have made major
progress in the execution of our strategy. We have significantly expanded
ScienceDirect accelerating the migration of our business from print to
electronic information services, and we are now reaching new usage groups. Our
sales and customer services activities have been significantly expanded and we
have continued to upgrade our systems infrastructure to support our growth
strategy.

Turnover and operating profit in the Science & Medical business increased by
7% and 12% respectively at constant rates of exchange, or 8% and 12% excluding
acquisitions and disposals. The good sales growth was driven by the stronger
subscription renewals in the year and the increasing contribution from
Internet services.  The previously adverse subscriber attrition trends were
reversed. Operating margins were slightly higher reflecting the strong revenue
growth, with the significant increase in investment, in new product and sales
and marketing initiatives, offset by cost savings in production, distribution
and back office functions.

The customer takeup of the ScienceDirect online services continues to progress
well. ScienceDirect now covers over 45% of the subscription revenues, up from
25% a year ago, and usage is growing rapidly with more than 15 million page
views in January 2001. Over 1,200,000 scientific articles can now be retrieved
in full text search over the web. New functionalities and customised web
services for specific user groups, such as PhysicsDirect, PharmaDirect, and
EngineeringDirect, have been introduced, increasing utility and relevance and
expanding the user base. The ScienceDirect sales force was doubled and
customer service activities significantly expanded to capture the market
opportunity.

In addition to the positive impact on subscription renewals, the Internet
services contributed an additional 2 percentage points to sales growth. The
new policy on pricing introduced for the 2000 subscription year, moderating
increases and the impact of currencies so as to give more predictable journal
pricing for customers, also contributed to the stronger renewals and helped
accelerate the migration from print to electronic products.

The breadth of Elsevier Science's services has extended through acquisition:
to the library community with Endeavor, the leading provider of digital
library systems, and to the pharmaceutical industry through Afferent, with its
advanced drug screening software. In June, the Springhouse business, focused
on the nursing community, was sold for $105 million.

The medical publishing and communications business in 2000 reported turnover
lower by 15% due to the disposal of Springhouse. Underlying sales were
marginally ahead and operating profits up 22% following reorganisation of the
sponsored communications business and in France after the weak performance in
1999. The year ended with good growth momentum as the benefit of the sales
force expansion began to take effect.

The outlook for the Science & Medical business is good. Revenue growth
momentum is strong with high subscription renewals expected and an expanding
customer base for the ScienceDirect product. Initiative spending will remain
high as further progress is made on customisation, functionalities and
marketing with the increased investment balanced by further cost savings
expected from the full year effect of savings in 2000 and as new systems go
live.

LEGAL

                                                                       % change
                             2000   1999    2000       1999         at constant
                               £m     £m   Eurom      Eurom          currencies
Turnover

LEXIS-NEXIS US                 47    854   1,553      1,298                  4%
LEXIS-NEXIS International     254    233     417        354                 11%
                            1,201  1,087   1,970      1,652                  5%
Adjusted operating profit     237    282     389        428               (19)%
Operating margin            19.7%  25.9%   19.7%      25.9%           (6.2) pts

In 2000, we have made strong progress against our key strategic priorities. We
have launched new and upgraded Internet products and services which have been
well received, most importantly the core research services of lexis.com and
nexis.com for the US legal and corporate/government markets respectively. We
have significantly expanded our sales and marketing activities, and have been
building our global capability and presence through acquisition and alliance.
Our results have been impacted by this investment programme, but the progress
made is substantial.

Turnover in the Legal business increased by 5%, or 3% excluding acquisitions,
and operating profit was down 19%. This reflects the significant step up in
investment, particularly at LEXIS-NEXIS, to deliver substantially upgraded
products and services, and sales and marketing programmes. The investment was
partly funded by the major cost savings programme. Operating margins were
correspondingly lower by 6.2 percentage points at 19.7%, from which they are
expected to recover as the investment pays off. At LEXIS-NEXIS, turnover
excluding acquisitions was up 2% whilst operating profits were 24% lower.

In the US Legal Markets, online revenues grew 5% with the second half growth
showing a continuing improvement over the first. This is partly offset by
lower print and CD-ROM sales as business migrates online. Online usage is
growing dramatically as customers migrate to the significantly upgraded
functionalities and services of the lexis.com platform, which now accounts for
more than 65% of searches. The Martindale Hubbell legal directory business had
another successful year.

The enhanced lexis.com is a truly competitive product and we continue to add
content and functionality to improve and differentiate our service. Key
content licenses were secured through long term agreements with CCH and Tax
Analysts, both leading publishers of highly valued tax material, making
LEXIS-NEXIS the most comprehensive online source of tax and accounting
information available worldwide. Case law summaries have now been added to the
LEXIS-NEXIS federal and state case law collection. These summaries cover cases
since 1995 and we are working aggressively to include earlier years, having
started with those cases most often accessed.

Particularly encouraging for the future has been the success in meeting our
goal of competitive parity in product preference in law schools, where user
preferences are first formed. The most recent independent market research
shows lexis.com to have a parity preference amongst law students, a
substantial improvement from a year ago and representing an important
milestone.

To meet the needs of US attorneys in small firm and single-lawyer practices,
the lexisONE.com service was launched with free and fee-based research and
legal forms, as well as resources to help attorneys manage firm business,
client relationships and their careers.

In US Corporate and Federal Markets, Nexis online revenues grew by 4%, a major
turnaround from the 4% decline seen the previous year, with a particularly
strong second half. The launch of the significantly upgraded flagship product,
nexis.com, has been exceptionally well received in the market and is driving
new sales and expansion of existing customer accounts.

As in US Legal markets, we are building customised solutions with our
customers that are both industry and function specific, eg. insurance, media,
sales support, mergers and acquisitions, business intelligence etc, that
integrate searching across a customer's Intranet, LEXIS-NEXIS and other
information sources, including the web. Alliances with major systems
suppliers, such as Siebel and Verity, have embedded nexis.com in their
products extending our penetration of the business market.

Across LEXIS-NEXIS the major re-engineering programme has continued to deliver
substantial cost savings, in excess of $90m, with almost every area
reengineered, including production, IT, administration and other support
services. In addition to releasing substantial funds for reinvestment, the
re-engineering is making LEXIS-NEXIS a leaner, faster moving organisation.

LEXIS-NEXIS International businesses outside the US (formerly the Reed
Elsevier Legal Division) reported turnover and operating profit up 11% and 1%
respectively, or 5% and flat excluding acquisitions, reflecting solid sales
performance and a significant increase in new product and marketing
investment.

In the UK, the Butterworth Lexis Direct service has maintained a leadership
position with expanded content and new functionalities. During the year,
customised services were added in specialist fields, such as Human Rights
Direct and EU Direct, and, in partnership with a leading legal training firm,
CPD Direct was launched, providing online training and professional
development. In France, a major initiative was the launch of the pre-eminent
French case law database, Juris-Data, as an online service.

Acquisitions were also made in the year in US, UK, Asia and Latin America to
extend our global capability. In International Markets, Eclipse in the UK
added a leading publisher in UK employment law and related fields which is an
important growing area of law. In Corporate and Federal Markets, we acquired
the Riskwise group of companies which provide online identify verification and
fraud-risk solutions for the rapidly growing e-commerce industry and is an
excellent fit with our existing public record business.

In recognition that our markets and customers are increasingly becoming
global, we took steps to develop a global product and technology platform to
serve as an underpinning to link all of our individual country offerings, and
to ensure that content available on any Reed Elsevier legal offering can be
delivered to any of our customers anywhere else around the globe.  We also
made the important decision to adopt LEXIS-NEXIS as our global brand.  This
will be implemented progressively across our International markets this year.

The outlook for the Legal business is positive and improving. The success of
lexis.com, and the significantly upgraded sales and marketing efforts, will
start to be reflected in the results going forward as opportunities are
presented when subscriptions come up for renewal, and as ingrained preferences
for competitor products are overcome. There is now real momentum behind
nexis.com, and international markets outside the US continue to perform.

Education
                                                                    % change
                                          2000  1999   2000  1999   at constant
                                            £m    £m  Euro m Euro m  currencies
Turnover

Reed Educational & Professional            202   181    331   275          9%
Publishing
Adjusted operating profit                   40    34     66    52         15%
Operating margin                         19.8% 18.8%  19.8% 18.8%     1.0 pts

Reed Educational & Professional Publishing saw revenues and operating profit
increase by 9% and 15% respectively. Rigby, the US supplementary business, had
a particularly good year with revenues 37% ahead driven by market share gains
and a very successful launch of the new Rigby literacy programme. In UK
Schools, sales in the Primary market were lower than the prior year which
benefited from exceptional, ring fenced government funding for literacy
materials. In Secondary, however, sales were up 23% on strong new publishing
programmes addressing curriculum changes. The Australian schools business also
performed well. The outlook for Reed Educational & Professional Publishing
business remains good.

BUSINESS

                                                                       % change
                                            2000  1999  2000    1999 at constant
                                              £m    £m Euro m Euro m currencies
Turnover

Cahners Business Information                 665   542 1,090     824        15%
Reed Business Information                    270   243   443     369        11%
Elsevier Business Information (including     278   270   456     411        11%
Tuition)
Reed Exhibition Companies                    358   301   587     458        18%
OAG Worldwide                                 72    85   118     129      (19)%
Other                                         29    29    48      44
                                           1,672 1,470 2,742   2,235        12%
Adjusted operating profit                    264   245   433     373         7%
Operating margin                           15.8% 16.7% 15.8%   16.7%  (0.9) pts

2000 has seen a good recovery in trading performance and major progress on our
strategic initiatives to accelerate growth. The businesses have been brought
together in one cohesive global division and the portfolio refocused on fewer,
faster growing sectors through a programme of acquisitions and disposals. We
have successfully launched Internet portals in key sectors, as well as new
print magazines and exhibitions. Efficiency was significantly improved through
the major cost savings programmes, funding in part the substantial increase in
investment.

Turnover and operating profit in the Business segment increased by 12% and 7%
respectively at constant rates of exchange. Excluding acquisitions and
disposals, the figures were 4% and 3% respectively. Turnover growth was held
back by the unfavourable cycling of non-annual exhibitions and lower revenues
in the travel businesses being sold. Operating margins at 15.8% were 0.9
percentage points lower reflecting the significant increase in investment,
although this is substantially funded by the cost saving programme.

Cahners Business Information turnover and operating profits were up 5% and 30%
respectively before the impact of acquisitions. The Electronics, Supply Chain,
Retail and Entertainment sectors performed particularly well, with
Manufacturing flat and Cahners Travel Group lower. New product launches in
both print and Internet services added 2% to revenue growth. Operating margins
improved, despite a significant increase in new product investment, reflecting
the major restructuring programme in the second half of 1999.

Substantial progress has been made in the last 12 months in the development
and execution of Cahners Internet strategy, through launch, alliance and
acquisition. Internet portals have been launched in key sectors including
Electronics, Manufacturing, Entertainment, Television and Telecommunications
and in over 15 other sectors using the e:logic platform. The market
opportunities have been reassessed as clearer business models emerge and are
not considered as large as first thought. Our portals have, however, been well
received in their markets with good growth in traffic and growing advertising
revenues. We have reprioritised some of the Internet investment to take
account of this. For instance, within the Manufacturing sector we are
migrating the joint venture with i2 into a more straightforward licensing
arrangement and refocused the web service on the design, automation and supply
chain/logistics segments of Manufacturing. The recent downturn in so many
dot.com valuations reinforces the importance of the strengths that we have in
strong brands, key content and an established customer base.

In May, Cahners made the $300 million acquisition of CMD Group, a leading
international supplier of information to the construction industry. Combined
with Cahners existing construction magazines and websites, CMD provides a
strong platform from which to lead the industry in print and online
information services.

Cahners also acquired, in June for $73 million, e:Logic, a fast growing and
leading application service provider of web development, design and delivery
systems to media and Internet companies. e:Logic provides Cahners with world
class content management technology and is accelerating our strategy of
building leading Internet portals.

At Reed Business Information, turnover increased by 11%, or 7% excluding
acquisitions, with stronger growth and market share gains in display and
recruitment advertising in the UK magazines and in Internet revenues. The
Computer, Personnel, Aerospace and Science sectors performed particularly
well. Underlying operating profits were 1% lower, reflecting the major
increase in investment, particularly in totaljobs.com, the online recruitment
service, which commands the leading market share in the UK. Other initiatives
include the 75/25 computerweekly.com joint venture with InterX to combine
RBI's brands, content and publishing expertise with InterX's technical and
product data services.

At OAG Worldwide, turnover declined by 19% due to portfolio rationalisation
ahead of its impending sale and lower sales of the print product. Investment
has been significantly increased in new web products and the OAG.com and
OAGMobile services were launched in the second half. The sale of the business
is well advanced.

At Elsevier Business Information, turnover and operating profits were up 11%
and 5% respectively, or 7% and 10% excluding acquisitions. Strong performances
were seen across the businesses in the Netherlands, Belgium, Spain and France.
In the Netherlands, the Business and Management, Personnel, Healthcare and
Retail sectors were particularly strong and buoyant advertising demand was
captured with the launch of supplements. EBI's zibb.nl was successfully
launched in the year and is now a leading general business information portal
in the Netherlands.

The portfolio was extended by the acquisition in July of the Stammer business
in Italy, as part of the Miller Freeman Europe transaction, and other
acquisitions were made in France, Spain and Germany. Disposals of the K G Saur
reference business was completed and a number of the non core Tuition
businesses have been, or are in the process of being, sold.

Turnover at Reed Exhibition Companies increased by 18% and operating profit by
19%. As several major non-annual shows in the UK and US did not take place in
2000, excluding acquisitions, revenue grew by 1% and operating profit declined
by 8%. This also reflects the significant new show launch programme, with over
35 new shows launched, and a significant step up in investment in show related
websites, of which there are now over 250. These will provide more accessible
and focused pre and post event services, including contact broking, to
exhibitors and attendees.

In July, Reed Elsevier acquired for £360m/Euro585m the leading trade
exhibition organiser in Europe, Miller Freeman Europe, with operations in
France, Spain, Italy, Germany and Scandinavia. The portfolio has over 100
shows and 66 related websites and includes prestigious international and
national domestic events across a number of sectors, including building and
construction, retail, food and hospitality, and environmental services. The
post acquisition performance has been ahead of expectations.

The outlook for the Business segment in 2001 is positive. Investment levels
will remain high with more funding behind a number of successful print
launches and some cutback on Internet spending to reflect changes in revenue
expectations. The slowing of the US economy is a concern. However, it is
expected to be manageable as the momentum across the businesses is strong and
new product revenues are growing. The disposal of businesses will affect the
reported results, balanced by a greater contribution from acquisitions made in
the last year and favourable show cycling at Exhibitions.

REVIEW OF 2000 FINANCIAL PERFORMANCE

REED ELSEVIER COMBINED BUSINESSES

Profit and loss

The reported profit before tax for the Reed Elsevier combined businesses,
including exceptional items and the FRS10 amortisation of goodwill and
intangible assets, was £192m/Euro315m, which compares with a reported profit
of £105m/Euro160m in 1999. The increase includes the favourable movement in
exceptional items with lower reorganisation costs and the gain on disposals of
businesses. The reported attributable profit of £33m/Euro54m compares with a
reported attributable loss of £63m/Euro95m in 1999.

Turnover increased by 11% expressed in sterling to £3,768m, and by 20%
expressed in euros to Euro6,180m.

Excluding exceptional items and the amortisation of goodwill and intangible
assets, adjusted operating profits were flat expressed in sterling at £793m,
and up 8% expressed in euros at Euro1,301m. Operating margins at 21.0% were
2.4 percentage points below the prior year principally reflecting the major
investment programme less cost reductions achieved in production, distribution
and support areas. Excluding acquisitions and disposals and currency
translation effects, revenue growth was 5% whilst costs increased by 6%.

The amortisation charge for goodwill and intangible assets amounted to £468m/
Euro768m, up £95m/Euro201m reflecting acquisitions made in 1999 and 2000, and
currency translation effects.

Exceptional items showed a pre-tax charge of £30m/Euro49m, comprising £38m/
Euro63m on acquisition related costs, £77m/Euro126m in respect of the major
restructuring programme initiated in 1999, less £85m/Euro140m profit on sale
of businesses. This compares with a net charge on exceptional items in 1999 of
£232m/Euro352m, of which £161m/Euro244m related to restructuring.

Net interest expense, at £103m/Euro169m, was £21m/Euro44m higher than in the
previous year principally due to the financing of acquisitions completed in
2000 and currency translation. Net interest cover was 8 times.

Adjusted profit before tax, which excludes the amortisation of goodwill and
intangible assets and exceptional items, at £690m/Euro1,132m, was 3% lower
than in previous years expressed in sterling, and 5% higher expressed in
euros, or 3% lower at constant exchange rates.

The effective tax rate on adjusted earnings was slightly higher at 25.9% (1999
25.6%). The adjusted profit attributable to shareholders of £511m/Euro838m
compared to £527m/Euro801m in 1999, 3% lower at constant exchange rates.

Cash flows, acquisitions, disposals and debt

Reed Elsevier generates significant cash flows as its principal businesses do
not require major fixed or working capital investments. Capital expenditure
principally relates to computer equipment and, increasingly, investment in
systems infrastructure to support electronic publishing activities.

Total capital expenditure in the year amounted to £144m/Euro236m, broadly
similar to the prior year level. Depreciation in the year was £118m/Euro194m.
Working capital requirements are negative overall, due to the substantial
proportion of revenues received through subscription and similar advanced
receipts.

Adjusted operating cash flow, before exceptional items, was £775m/Euro1,271m,
representing a conversion rate of operating profit into cash flow of 98%, as
for 1999.

Free cash flow - after interest, taxation and dividends but before acquisition
spend and exceptional receipts and payments - was £334m/Euro548m compared to £
187m/Euro286m in 1999. The increase in 2000 principally reflects reduced
dividend payments as a result of the adjustment to dividend policy, and
reduced taxation payments. Net exceptional cash inflows of £90m/Euro148m
relate to the £153m/Euro251m proceeds from sale of businesses, less
exceptional acquisition related costs and restructuring.

In 2000, acquisitions were made for a total consideration of £952m/Euro1,562m,
including debt of £48m/Euro79m. An amount of £998m/Euro1,637m was capitalised
as goodwill and intangible assets. The 2000 acquisitions contributed £12m/Euro
20m to adjusted operating profit in the year and added £33m/Euro54m to
operating cash flow.

Net borrowings at 31 December 2000 were £433m/Euro697m, a reduction of £633m/
Euro1,020m on the prior year end, which reflected proceeds from the joint
international share offering by Reed International and Elsevier in November
2000, together with the free cash flow and exceptional receipts, less spend on
acquisitions.

Gross borrowings at 31 December 2000 amounted to £2,027m/Euro3,263m,
denominated mostly in US dollars and partly offset by cash balances totalling
£1,594m/Euro2,566m invested in short term deposits and marketable securities.
Approximately 98% of cash balances were held in sterling, euros and US
dollars. A total of 46% of Reed Elsevier's gross borrowings were at fixed
rates, including £516m/Euro831m of floating rate debt fixed through the use of
interest rate swaps. At 31 December 2000, the fixed rate debt had a weighted
average interest coupon of 6.6% and an average remaining life of 7.7 years.
The net interest expense also reflects the interest yield differentials
between the short term investments and long term fixed rate borrowings.

THE HARCOURT ACQUISITION AND EQUITY AND DEBT FINANCING

On 27 October 2000, Reed Elsevier entered into a definitive agreement with
Harcourt General, Inc (Harcourt) to make a tender offer of $59 per share of
common stock, or share equivalent, for the entire issued share capital of
Harcourt. The offer values the company at $4.45 billion (£3.10 billion/Euro
5.37 billion at exchange rates then prevailing). Reed Elsevier plc also
entered into a definitive agreement with The Thomson Corporation (Thomson) to
on-sell, for pre-tax proceeds of $2.06 billion, the Harcourt Higher Education
business and the Corporate and Professional Services businesses other than
educational and clinical testing.

Following completion of the offer and the on-sale of businesses, Reed Elsevier
will have acquired Harcourt's Scientific, Technical and Medical (STM) business
and its K-12 (kindergarten to grade 12) Schools Education and Testing
businesses for an implied value of approximately $4.5 billion, taking into
account corporate net debt, taxes payable on the on-sale proceeds and the
assumption of other corporate liabilities. In the year to 31 October 2000,
these businesses had sales of $1.7 billion (STM $688m; 1999 $633m and
Educational and Testing $990m, 1999 $787m), adjusted operating profits
(pre-amortisation of goodwill and intangible assets) of $371 million (STM
$161m; 1999 $138m and Education and Testing $210m, 1999 $159m), and net assets
of $1.1 billion (including $0.7 billion of goodwill and intangible assets)
before corporate net debt of $1.2 billion.

The acquisition and the on-sale to Thomson is subject to customary regulatory
approvals, which may require some divestment of assets.

In order to fund the acquisition a placing of new shares in Reed International
and Elsevier was undertaken jointly in November 2000 and new debt facilities
obtained. The placing of new ordinary shares in the parent companies was
executed through an accelerated bookbuild process completed on 29 November
2000. The net proceeds of the placing totalled £1,236m/Euro2,071m through the
issue of 113.7m ordinary shares in Reed International at 625 pence per share
and 66.26m ordinary shares in Elsevier at Euro14.50 per share, including the
exercise of over-allotment options by the joint bookrunners. The majority of
the proceeds have been hedged into US dollars.

This amount represented 9.9% of the share capitals of both parent companies.
It is intended that Reed International should subscribe for additional
R-shares in Elsevier, which represent the cross-shareholding of Reed
International in Elsevier, so as to maintain Reed International's indirect
equity interest at 5.8% on a fully diluted basis. This will reflect the
respective economic interests of the shareholders of Reed International and
Elsevier in the combined businesses represented by the equalisation
arrangements. The equalisation ratio is unaffected.

The initial acquisition funding will be provided by cash and short term
borrowings off commercial paper programmes or draw down against committed
credit facilities, and potentially by the assumption of up to $850 million of
Harcourt public debt securities. The facilities include $6.5bn of new bank
facilities put in place in November 2000. The on-sale agreement between Reed
Elsevier and Thomson has conditions which in effect mirror the terms of the
merger agreement between Reed Elsevier and Harcourt, and the on-sale should
therefore be completed at the time of the Harcourt acquisition or shortly
thereafter dependent on the tender offer process. It is intended that the
majority of the short term borrowings should be refinanced through the
issuance of term debt securities.

The blended financing rate on the debt component of the funding, inclusive of
the Harcourt public debt which Reed Elsevier may potentially assume, and the
cost of long term debt including interest rate hedging undertaken, is expected
to be approximately 7.2%.

Proforma combined net borrowings of the Reed Elsevier businesses (as at 31
December 2000) and Harcourt (as at 31 October 2000), and taking into account
the acquisition financing and the on-sale of businesses to Thomson, would be
approximately £3.2 billion/Euro5.2 billion.

PARENT COMPANIES

Profit and loss account

Adjusted earnings per share for Reed International were 23.3p, a decline of 5%
compared to the previous year. Adjusted earnings per share for Elsevier were
Euro0.59, an increase of 4%. The difference in percentage change is entirely
attributable to the impact of the strengthening, on average, of sterling
against the euro in 2000. At constant rates of exchange, the adjusted earnings
per share of both companies would have shown a decline of 5% over the previous
year.

After their share of the exceptional items and the charge in respect of
goodwill and intangible assets amortisation, the reported earnings per share
of Reed International after tax credit equalisation and Elsevier were 1.0p and
Euro0.04, compared to a loss per share in 1999 of 3.4p and Euro0.07,
respectively.

Dividends

Dividends to Reed International and Elsevier shareholders are equalised at the
gross level, including the benefit of the UK attributable tax credit of 10%
received by certain Reed International shareholders. The exchange rate used
for each dividend calculation - as defined in the Reed Elsevier merger
agreement - is the spot euro/sterling exchange rate, averaged over a period of
five business days commencing with the tenth business day before the
announcement of the proposed dividend.

The board of Reed International has proposed a final dividend of 6.9p, giving
a total dividend of 10.0p for the year, the same as for 1999. The boards of
Elsevier, in accordance with the dividend equalisation arrangements, have
proposed a final dividend of Euro0.19. This results in a total dividend of
Euro0.28 for the year, 4% higher than in 1999. The difference in percentage
growth is attributable to currency movements.

Dividend cover for Reed International, using adjusted earnings, was 2.1 times.
For Elsevier, the adjusted dividend cover was 2.1 times. Measured for the
combined businesses, dividend cover was 2.1 times compared with 1999 at 2.3
times

FORWARD-LOOKING STATEMENTS

These Preliminary Statements contain forward-looking statements within the
meaning of Section 27A of the Securities Act 1933, as amended and Section 21E
of the Securities Exchange Act 1934, as amended. These statements are subject
to a number of risks and uncertainties and actual results and events could
differ materially from those currently being anticipated as reflected in such
forward-looking statements. The terms 'expect', 'should be', 'will be', and
similar expressions identify forward-looking statements. Factors which may
cause future outcomes to differ from those foreseen in forward-looking
statements include, but are not limited to, general economic conditions and
business conditions in Reed Elsevier's markets, customers' acceptance of its
products and services, the actions of competitors, changes in law and legal
interpretation affecting Reed Elsevier's intellectual property rights, and the
impact of technological change.

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