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Reed Elsevier PLC (REL)

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Thursday 21 February, 2008

Reed Elsevier PLC

2007 PRELIMINARY RESULTS

Reed Elsevier PLC
21 February 2008

           Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV
                                21 February 2008

                     REED ELSEVIER 2007 PRELIMINARY RESULTS

HIGHLIGHTS

•  Strong financial performance for 2007, good momentum and significant
   plans to accelerate growth

•  Major reshaping of portfolio
   -  Sale of Harcourt Education now completed
   -  Planned divestment of Reed Business Information

•  Significant restructuring programme around a more cohesive business
   delivering important cost efficiencies

•  Agreed £2.1 billion/€2.8 billion acquisition of ChoicePoint, Inc
   separately announced today

Strong financial performance

•  Underlying revenue growth +6%, driven by good growth in online
   information and workflow solutions; reported revenues of £4,584m/€6,693m, up 
   2% and 1% respectively in sterling and euros

•  Adjusted operating margin +80 basis points (underlying +100 basis
   points), from good revenue growth and ongoing cost initiatives

•  Adjusted earnings per share +12% at constant currencies; at reported
   rates up 7% to 35.9p for Reed Elsevier PLC and up 5% to €0.80 for Reed 
   Elsevier NV

•  US dollar decline adversely affects growth rates on translation at
   reported exchange rates

Major reshaping and strengthening of portfolio

•  Sale of Harcourt Education for £2.5bn/€3.6bn successfully completed
   with substantial gain; net proceeds distributed to shareholders in January 
   2008

•  Reed Business Information to be divested, reducing exposure to
   advertising markets and cyclicality

•  Acquisition of ChoicePoint, Inc (2007 revenues £491m/€717m)
   significantly expands position in fast growing risk management marketplace

•  More cohesive and synergistic business with stronger growth prospects

Major restructuring to accelerate growth

•  Further consolidation and streamlining of operational activities and
   back office support in a more integrated company

•  Significant savings of £245m/€335m over 2008-2011 with annual savings
   targeted of £100m/€135m by 2011, over and above normal expected margin
   improvement

•  Exceptional costs of approximately £140m/€190m; cash payback in 2.5 years

Reed Elsevier's Chief Executive Officer, Sir Crispin Davis, commented:

'We have made good progress over the last year.  Investment against our online
growth and workflow solutions strategy is paying off with good revenue momentum.
Together with our cost initiatives, this is driving underlying margin
improvement and a strong earnings performance.  The decline of the US dollar
takes some shine off the earnings performance expressed in sterling and euros,
but the strength of the underlying growth is very encouraging with 2007
representing the highest constant currency earnings growth of the last ten
years.

'The sale of Harcourt Education has moved us towards a more consistent, cohesive
and synergistic business and today we have announced a further major step with
the planned divestment of Reed Business Information ('RBI').  RBI is a
well-managed high quality business as evidenced by the success of its online
growth and the control of costs.   Its advertising revenue model and the
inherent cyclicality fit less well however with the subscription-based
information and workflow solutions focus of Reed Elsevier's strategy.

'The move to a more cohesive portfolio provides us with the opportunity to
accelerate progress in consolidating and streamlining our technology, operations
and back office support.  In doing so, Reed Elsevier becomes a more integrated
company with significant savings in cost structure.  The restructuring plan
announced today has an attractive payback and will make a meaningful addition to
margin and earnings growth.

'The acquisition of ChoicePoint represents a major further step in the building
of our risk management business and in the development of Reed Elsevier's online
workflow solutions strategy.  The market growth in risk information and
analytics is highly attractive and ChoicePoint brings important assets and
market positions that fit well with our existing business and, in combination,
can be leveraged to very good effect.

'ChoicePoint's insurance business in particular has seen strong consistent
growth, and through the combination of ChoicePoint's highly regarded data and
analytics assets and our leading LexisNexis risk technology, we can further
develop compelling offerings for customers and realise significant synergy
benefits.  The acquisition will accelerate Reed Elsevier's revenue and profit
growth and deliver a good and growing return on capital.

'The outlook for Reed Elsevier is very positive.  We are well positioned in
attractive markets; the momentum in the business is showing through in the good
financial performance; and the changes we are making will strengthen the
business and accelerate our growth.'

REED ELSEVIER COMBINED BUSINESSES

Continuing operations                       2007     2006   Change        2007     2006   Change      Change at
                                              £m       £m        %          €m       €m        %       constant
                                                                                                     currencies
Revenue                                    4,584    4,509      +2%       6,693    6,628      +1%            +6%
Reported operating profit                    888      837      +6%       1,296    1,231      +5%           +12%
Adjusted operating profit                  1,137    1,081      +5%       1,660    1,589      +4%           +11%
Adjusted operating margin                  24.8%    24.0%                24.8%    24.0%
Adjusted operating cash flow               1,108    1,086      +2%       1,618    1,596      +1%            +6%


Parent companies                                  Reed Elsevier PLC               Reed Elsevier NV       Change at
                                                                                                          constant
                                             2007     2006   Change         2007     2006   Change      currencies
Continuing and discontinued operations                            %                              %               %
Reported earnings per share                 49.7p    25.6p     +94%        €1.10    €0.59     +86%
Adjusted earnings per share                 35.9p    33.6p      +7%        €0.80    €0.76      +5%            +12%
Dividend per share                          18.1p    15.9p     +14%       €0.425   €0.406      +5%

The results of the Harcourt Education division are presented as discontinued
operations and are excluded from revenue, reported and adjusted operating
profit, adjusted operating margin and adjusted operating cash flow.

Adjusted figures are presented as additional performance measures and are stated
before amortisation of acquired intangible assets and acquisition integration
costs, and, in respect of earnings reflect a tax rate that excludes the effect
of movements in deferred taxation assets and liabilities that are not expected
to crystallise in the near term.  Profit and loss on disposals and other
non-operating items are also excluded from the adjusted figures.
Reconciliations between the reported and adjusted figures are provided in note 5
to the combined financial information and note 1 to the summary financial
information of the respective parent companies.


ENQUIRIES                                 Sybella Stanley (Investors)                     Patrick Kerr (Media)
                                                     +44 20 7166 5630                         +44 20 7166 5646


FINANCIAL HIGHLIGHTS

Adjusted Figures

Continuing operations (Elsevier, LexisNexis and Reed Business)

Continued revenue momentum and margin improvement

•   Good performances seen across all the continuing businesses.

•   Revenues up 2% to £4,584m/up 1% to €6,693m, up 6% at constant currencies.

•   Underlying revenue growth, excluding acquisitions and
    disposals, of 6% driven by strong growth in online information and workflow
    solutions.

•   Adjusted operating profits, before amortisation of acquired
    intangible assets and acquisition integration costs, up 5% to £1,137m/ up 4% 
    to €1,660m, up 11% at constant currencies.  Underlying adjusted operating 
    profit growth of 10%.

•   Adjusted operating margins up 0.8% points (1.0% points
    underlying) at 24.8%, reflecting good revenue growth and continuing cost
    efficiency.

•   Reported revenue and operating profit growth in sterling and
    euros restrained by the effect on translation of the average year on year
    decline in the US dollar of 9% against sterling and 10% against the euro.

•   11% growth in online information and workflow solutions which
    now account for nearly 50% of revenues reflecting the success of the 
    investment led digital growth strategy.

Strong cash flow

•   97% of adjusted operating profits converted into cash reflecting focus on 
    management of working capital.

Increasing return on capital

•   Return on invested capital up 0.8% points to 11.8% post tax
    from increased profitability and low capital requirements.  This is the 
    sixth successive year of improving return on capital.

Total operations (including Harcourt Education)

Growth in adjusted earnings and dividends

•   Adjusted earnings per share, at reported exchange rates, up 7%
    to 35.9p for Reed Elsevier PLC and up 5% to €0.80 for Reed Elsevier NV, up 
    12% at constant currencies.

•   Final dividends proposed of 13.6p and €0.311 for Reed Elsevier
    PLC and Reed Elsevier NV respectively.  Total dividends for 2007 of 18.1p 
    for Reed Elsevier PLC, up 14%, and €0.425 for Reed Elsevier NV, up 5%. 
    (Differential growth rates in the equalised dividends reflect movements in 
    the sterling euro exchange rate.)

•   Cash returned to shareholders in January 2008 of £2.0bn/€2.7bn
    from net proceeds of Harcourt Education sale.

Reported Figures

•   Reported operating profit, after amortisation of acquired
    intangible assets and acquisition integration costs, up 6% to £888m/up 5% to
    €1,296m.

•   Reported earnings per share, including disposal gains, up 94%
    to 49.7p/up 86% to €1.10.  The growth principally reflects the improvement 
    in underlying operating performance, the gain on the sale of Harcourt 
    Education, and movements in deferred tax balances not expected to 
    crystallise in the near term.

STRENGTHENING THE PORTFOLIO

The Reed Elsevier business is being reshaped through the sale of Harcourt
Education and the planned divestment of Reed Business Information (RBI) to
create a more consistent, cohesive and synergistic business and accelerate
growth.

As previously announced, the Harcourt Education business was sold in two
separate transactions that have now completed.  The aggregate proceeds were
£2.5bn/€3.6bn, representing 21 times 2006 adjusted operating profits and a
substantial gain.  After taxation and other costs related to the sale, the
estimated net proceeds of £2.0bn/€2.7bn were distributed to shareholders on 18
January 2008.

The planned divestment of RBI is a further major step in our portfolio
development.  Although RBI has had considerable success in developing
high-growth online services, its advertising revenue model and its inherent
cyclicality fit less well with the subscription based information and workflow
solutions focus of Reed Elsevier's strategy.  Advertising accounts for
approximately 60% of revenues.   In the year to 31 December 2007, RBI had
revenues of £906m/€1,323m and adjusted operating profits of £119m/€174m.  The
precise method of divestment of RBI will be the subject of review in coming
months.  The Reed Exhibitions business will be retained.

The acquisition of ChoicePoint, and its combination with the very successful
LexisNexis Risk Information and Analytics Group ('RIAG'), creates for Reed
Elsevier a position as a world leading provider of risk information and
analytics by adding a major presence in the insurance segment and complementary
products and new capabilities in the screening, authentication and public
records areas.

The acquisition will accelerate Reed Elsevier's growth and, through the
combination of ChoicePoint's highly regarded data and analytics assets and
RIAG's market leading technology infrastructure, will provide the opportunity to
develop more compelling products for the market and considerable synergy
benefits.

The acquisition of ChoicePoint meets all of Reed Elsevier's acquisition
financial criteria:  it is expected to accelerate Reed Elsevier's revenue and
profit growth;  be marginally accretive to earnings in the first year of
ownership with significant earnings enhancement thereafter;  have a post tax
return on capital in excess of Reed Elsevier's WACC in the third year of
ownership;  and add substantial net present value.

During 2007 further investment was made in new publishing and workflow solutions
through both organic development and selective acquisitions that meet Reed
Elsevier's strict growth and financial criteria.  These acquisitions are focused
in particular on accelerating our development and growth in e-health, legal
workflow solutions, risk information and analytics and exhibitions and are on
track to deliver a return on capital in excess of the weighted average cost of
capital within three years.  2008 should see continuing organic and acquisition
investment in workflow solutions to strengthen and accelerate growth in the
continuing businesses.

RESTRUCTURING PLAN:  COST AND ANNUAL SAVINGS

The reshaping of the portfolio and the good progress on the cost initiatives
announced last year, have provided the opportunity to take more radical action
on our cost base to capitalise on the more synergistic portfolio and accelerate
margin growth.  The restructuring plan represents further consolidation of
operational activities and back office support both within Elsevier and
LexisNexis and across the group.  The principal focus is on management
organisation, technology, operations, development engineering, production,
procurement, customer service and support, finance and administration.  Some of
these savings will be used to fund additional investment in new product, sales
and marketing to take advantage of the growing opportunities for workflow
solutions in our markets and to build further competitive differentiation.

The restructuring plan is targeted to deliver a total of £245m/€335m of cost
savings over the next four years, with progressive net annual savings reaching
£100m/€135m in 2011 over and above the normal expected annual margin improvement
and additional investment.  The annual savings targets over the 2008-11 years
are £15m/€20m in 2008; £50m/€70m in 2009; £80m/€110m in 2010; and £100m/€135m in
2011.  The exceptional restructuring costs are estimated to be approximately
£140m/€190m, most of which will be incurred in 2008.  These relate principally
to severance, outsourcing migration costs and associated property costs.  The
cash payback of the restructuring plan is approximately 2.5 years.

Ongoing cost efficiency to improve margins including savings from regular annual
restructuring initiatives are excluded from the above figures.

BALANCE SHEET

Reed Elsevier looks to maintain its capital efficiency through its progressive
dividend policy and annual share repurchase programme whilst having the balance
sheet strength to maintain access to the most cost effective sources of
borrowing and to support our strategic ambition in evolving professional
publishing and information markets. Over the longer term, we would expect net
debt to EBITDA to range between 2.0x and 3.0x depending on financial conditions
and acquisition opportunities and timing, consistent with a solid investment
grade credit rating.

OPERATING AND FINANCIAL REVIEW
                                             2007      2006    Change         2007     2006   Change     Change at
                                               £m        £m         %           €m       €m        %      constant
                                                                                                        currencies
CONTINUING OPERATIONS
Revenue
Elsevier                                    1,507     1,521       -1%        2,200    2,236      -2%           +4%
LexisNexis                                  1,594     1,570       +2%        2,328    2,308      +1%           +8%
Reed Business                               1,483     1,418       +5%        2,165    2,084      +4%           +7%
Total                                       4,584     4,509       +2%        6,693    6,628      +1%           +6%
Adjusted operating profit
Elsevier                                      477       465       +3%          696      683      +2%           +9%
LexisNexis                                    406       380       +7%          593      559      +6%          +14%
Reed Business                                 260       241       +8%          380      354      +7%          +10%
Unallocated items                             (6)       (5)                    (9)      (7)
Total                                       1,137     1,081       +5%        1,660    1,589      +4%          +11%

DISCONTINUED OPERATIONS
Revenue                                       752       889                  1,098    1,307
Adjusted operating profit                     121       129                    177      190

Adjusted figures and constant currency growth rates are used by Reed Elsevier as
additional performance measures. Adjusted operating profit is stated before the
amortisation of acquired intangible assets and acquisition integration costs.
Constant currency growth rates are based on 2006 full year average and hedge
exchange rates.

Unless otherwise indicated, all percentage movements in the following commentary
refer to performance at constant exchange rates. Underlying growth rates are
calculated at constant currencies, excluding acquisitions and disposals.

The reported operating profit figures are set out in note 2 to the combined
financial information and reconciled to the adjusted figures in note 5.

FORWARD LOOKING STATEMENTS

This Preliminary Statement contains forward looking statements within the
meaning of Section 27A of the US Securities Act 1933, as amended, and Section
21E of the US 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 in Reed Elsevier's
markets; exchange rate fluctuations; customers' acceptance of our products and
services; the actions of competitors; legislative, fiscal and regulatory
developments; changes in law and legal interpretations affecting Reed Elsevier's
intellectual property rights and internet communications; and the impact of
technological change.

ELSEVIER
                                            2007     2006    Change        2007     2006    Change         Change
                                              £m       £m         %          €m       €m         %    at constant
                                                                                                       currencies
Revenue
Science & Technology                         774      792       -2%       1,130    1,164       -3%            +2%
Health Sciences                              733      729       +1%       1,070    1,072        0%            +6%
                                           1,507    1,521       -1%       2,200    2,236       -2%            +4%
Adjusted operating profit                    477      465       +3%         696      683       +2%            +9%
Adjusted operating margin                  31.7%    30.6%   +1.1pts       31.7%    30.6%   +1.1pts        +1.4pts

Elsevier had a very successful year with good underlying growth driven by new
publishing and continued expansion of our online information and workflow
solutions.

Revenues and adjusted operating profits were up 6% and 10% respectively at
constant currencies before acquisitions and disposals.  After portfolio effects,
most notably the acquisition of the Beilstein chemical compounds database and
the sale of the MDL software business, revenues were up 4% and adjusted
operating profits up 9% at constant currencies.  The overall adjusted operating
margin improved by 1.1 percentage points, driven by revenue growth and cost
efficiency most particularly in production and procurement.

The Science & Technology business saw underlying revenue growth of 6%, or 2% at
constant currencies after acquisitions and disposals, reflecting journal
subscription renewals at record levels and growing online sales with increasing
market penetration.  ScienceDirect saw widening distribution especially in small
academic and emerging markets, and particular success from the further launch of
electronic books.

ScienceDirect online usage was again up over 20%.  Impact Factors, one of the
industry's standard measures of content quality, increased for 65% of our
journals, more than for any other major science and medical publisher.  Good
progress was also made in our customer service programmes with positive
developments across a wide range of surveyed measures.

In March, we acquired the full rights to the Beilstein chemical compounds
database, previously operated under licence, which is now being integrated with
other resources to deliver content rich and innovative online solutions.  In
October we sold the MDL software services business which increasingly did not
fit within Elsevier's strategy.

In Health Sciences, revenue growth at constant currencies was 6%, both before
and after the impact of acquisitions and disposals, driven by good growth in the
nursing and allied health professional sector, and expanding online solutions.
The year saw successful publishing and a growing appetite within the healthcare
industry for technology enabled information solutions to improve the quality and
effectiveness of diagnosis, treatment and care.  Growth was partly held back by
a flat performance in pharma advertising, with share gains compensating for
weaker markets.

Electronic products, such as the MDConsult clinical reference product, are
showing good double digit growth in usage.  The Evolve digital learning platform
had a successful year with a 40% increase in registered users.  New products
were rolled out with very positive market response. These included Mosby's
Nursing Skills, endorsed by the American Association of Clinical Nurses, which
offers detailed interactive guidance in over 500 skills drawn from our leading
reference works.  At the British Medical Awards in September, we won more top
awards for our publishing than any other publisher.

In addition to investment in new publishing and digital solutions, we continued
to expand our businesses in attractive high-growth segments through two highly
complementary acquisitions in December: Clinical Practice Model Resource Centre
(CPMRC), a leading provider of decision support solutions for nurses and
healthcare practitioners to improve patient care and safety; and, MEDai, a
provider of clinical outcome analytics and risk identification and management
for both the payers and providers of healthcare.

The outlook for Elsevier is positive.  Revenue momentum is good with successful
publishing, strong renewals and growing digital product in attractive markets.
The revenue growth and continuous actions to improve cost efficiency is driving
good underlying margin improvement.  We look forward to another successful year
in Elsevier in 2008.


LEXISNEXIS
                                            2007      2006    Change         2007      2006    Change         Change
                                              £m        £m         %           €m        €m         %    at constant
                                                                                                          currencies
Revenue
United States                              1,113     1,129       -1%        1,625     1,660       -2%            +7%
International                                481       441       +9%          703       648       +8%           +10%
                                           1,594     1,570       +2%        2,328     2,308       +1%            +8%
Adjusted operating profit                    406       380       +7%          593       559       +6%           +14%
Adjusted operating margin                  25.5%     24.2%   +1.3pts        25.5%     24.2%   +1.3pts        +1.3pts

LexisNexis also had a good year with a successful Total Solutions strategy both
in the US and internationally and good growth in risk information and analytics
markets.

Revenues and adjusted operating profits were up 7% and 12% respectively at
constant currencies before acquisitions, and 8% and 14% including acquisitions.
The overall adjusted operating margin improved by 1.3 percentage points,
reflecting the strong revenue growth and the actions taken to improve cost
efficiency.

In US Legal markets, strong subscription renewals and additional online
information and solutions sales, partly held back by fewer large sized discovery
cases, drove underlying revenue growth of 5%.

New Total Solutions products were introduced throughout the year in the core
areas of litigation, client development, practice management, and research.
Total Practice Advantage, with a series of releases in 2007, has seen particular
success providing small law firms with practice management and client
development tools in one integrated easy to use solution.  Other Total Solutions
are also growing well such as Total Litigator, combining case management tools,
document and evidence repositories, discovery tools, file and serve
applications, and research.

The growth in the attractive Total Solutions markets is being accelerated
through acquisition as well as organic investment.  In July, we acquired Juris,
which provides medium sized law firms with time and billing and other practice
management solutions, to complement what we have achieved in small law firms
with Total Practice Advantage.  In electronic discovery, we acquired Image
Capture Engineering in June to complement the Concordance business acquired last
year.  These businesses are being integrated within Total Litigator to service
the majority of electronic discovery needs and are steadily migrating to a
subscription model.

In US Corporate and Public Markets, underlying revenue growth was 6%.  Whilst
the news and business information business is slower growing, we saw strong
demand in risk management and in processing higher volumes for the US patent and
trademark office.  The Risk Information and Analytics business again saw
double-digit revenue growth and further good margin expansion driven by the
continued strength of the market combined with leading technology and content.
The business continues to expand its product offerings and build its presence in
this attractive sector.

The LexisNexis International business outside the US delivered underlying
revenue growth of 8% at constant rates, or 10% including acquisitions and strong
margin and profit growth.  Underlying revenue growth has now been at or around
this level for each of the last four years, driven by the growing penetration of
online information services across our markets and new publishing.  Good growth
was seen in the UK, France and Southern Africa in particular as well as in
emerging markets such as India, Korea, China and Taiwan.

To support the penetration of our Total Solutions strategy, we have been
realigning and transforming the sales organisation.   This has involved the
integration of multiple sales forces into one in the US, global sales
coordination, a substantial upgrade in capabilities and the deployment of our
portfolio solution selling methodology, tools and processes.  This will be
extended globally as Total Solutions products are introduced internationally.
Additionally, we have streamlined and strengthened our organisation by
establishing global management responsibilities for solutions development and
delivery, unified marketing, production and customer support.

The outlook for LexisNexis is positive.  The Total Solutions strategy, increased
penetration of online services internationally and the strong demand for risk
information and analytics is driving good revenue momentum.  LexisNexis has
shown meaningful good underlying margin improvement in each of the last seven
years and, with good revenue growth and continued action on costs, further
strong progress is expected.


REED BUSINESS
                                            2007     2006    Change        2007     2006    Change         Change
                                              £m       £m         %          €m       €m         %    at constant
                                                                                                       currencies
Revenue
Reed Business Information                    906      896       +1%       1,323    1,317        0%            +4%
Reed Exhibitions                             577      522      +11%         842      767      +10%           +13%
                                           1,483    1,418       +5%       2,165    2,084       +4%            +7%
Adjusted operating profit                    260      241       +8%         380      354       +7%           +10%
Adjusted operating margin                  17.5%    17.0%   +0.5pts       17.5%    17.0%   +0.5pts        +0.5pts

Reed Business has performed well this year with a strong performance in the
exhibitions business (partly held back by the cycling out of a number of
non-annual shows) and rapid growth in online services more than compensating for
print declines.

Revenues and adjusted operating profits were up 6% and 8% respectively at
constant currencies before acquisitions and disposals, or 7% and 10% after
portfolio changes.  The overall adjusted operating margin was up 0.5 percentage
points, with the cycling out of contribution from biennial joint venture
exhibitions reducing margin growth by 0.2 percentage points.

Reed Exhibitions saw revenues 13% ahead at constant currencies, or 12% excluding
acquisitions and disposals.  Strong growth was seen across the show portfolio
with particular success at the Mipim international property show in Cannes and
the JCK jewellery show in Las Vegas.  Adjusted operating profits were up 11% at
constant currencies, or 8% excluding acquisitions and disposals, held back by
the cycling out of the contribution from biennial joint venture shows.
Excluding the cycling of shows, underlying revenue growth and adjusted operating
profit growth were 10% and 11% respectively.

Thirty new shows were launched in the year, in sectors ranging from personal
care to aerospace and from Argentina to China.  The portfolio was also added to
through the acquisition of a joint venture interest in Alcantara Machado, the
leading show organiser in Brazil, and of a group of six international aerospace
shows.  The decision was taken to exit the defence sector and a sale process is
underway.

The Reed Business Information magazine and information businesses saw revenues
4% ahead at constant currencies, or 3% before acquisitions and disposals.
Continued strong growth in online services of 20% underlying more than
compensated for a 2% decline in print as the business migrates online.  Online
revenues now contribute 30% of RBI's revenues.  Adjusted operating profits were
up 10% at constant currencies through continued actions to improve cost
efficiency.

In the UK, underlying revenues were up 5% reflecting strong growth in online
sales, up 19% and which now represent 46% of total RBI UK revenue. Totaljobs,
the leading UK recruitment site, continued its rapid growth with revenues up
35%.  The number of market leading job boards increased from 10 to 12 in 2007
with the launch of UK regional sites in Scotland and the North West of England
and further launches are planned. In the Netherlands and International,
underlying revenue growth was 4% with good growth in online products. In the
Netherlands, Elsevier magazine reached record print circulation levels and
received an industry award as the number one magazine for advertisers and media
agencies.  In the US, RBI underlying revenue was flat, with online revenues
growing rapidly, offset by the decline in print including discontinued titles.
Advertising revenues grew rapidly across community sites, up 31%.  This reflects
surging web traffic as these sites increasingly become a starting point on the
web for the communities they serve with their mix of professional content,
community interaction and online tools proving attractive for both users and
advertisers.

The growth of online sales in RBI was accelerated by a number of acquisitions,
including BuyerZone, a fast growing online service for matching vendors and
buyers in procurement tendering, acquired in January 2007 and DoubleTrade, an
online tendering service, acquired in April 2007.  Both are performing strongly.

The outlook for Reed Business is positive.  The demand for exhibitions remains
good and advance bookings, particularly for the important first half of 2008,
are encouraging.  The business magazines and information businesses, whilst
seeing some general uncertainty in markets such as property and construction,
are seeing no overall shift in market trends with continued strong growth in
online services and slow decline in print.  Continued cost actions are expected
to deliver overall margin improvement together with the cycling in of joint
venture exhibitions.


DISCONTINUED OPERATIONS - HARCOURT EDUCATION
                                            2007     2006    Change        2007     2006    Change         Change
                                              £m       £m         %          €m       €m         %    at constant
                                                                                                       currencies
Revenue
Schools & Assessment                         708      776       -9%       1,034    1,141       -9%            -1%
International                                 44      113      -61%          64      166      -61%           -59%
                                             752      889      -15%       1,098    1,307      -16%            -9%
Adjusted operating profit                    121      129       -6%         177      190       -7%            +2%
Adjusted operating margin                  16.1%    14.5%   +1.6pts       16.1%    14.5%   +1.6pts        +1.8pts

Following announcement in February 2007 of the planned sale of Harcourt
Education, the division is presented as a discontinued operation.  On 4 May, the
sale of the Harcourt Education International and Harcourt Assessment businesses
to Pearson plc was announced, and on 16 July the sale of the Harcourt US K-12
Education businesses to Houghton Mifflin Riverdeep Group was announced.  The
disposals of the UK, Australian and New Zealand businesses of Harcourt Education
International completed in May 2007 with the South African business completing
in August 2007. The disposal of the Harcourt US K-12 Education businesses
completed in December 2007, and the disposal of Harcourt Assessment and the
remaining Harcourt Education International businesses completed in January 2008.

Harcourt performed well in US state book adoptions, particularly in the
secondary schools market, and saw a significant turnaround in operational
performance in the Assessment business.

The reduced revenues and adjusted operating profits reported for Harcourt
Education in the year reflect the timing of the business disposals and the
seasonality of the businesses.

The Harcourt Education US K-12 business saw revenues up 4% at constant
currencies for the first eleven months of the year with good growth in the basal
publishing businesses partly offset by a weaker supplemental market.  Harcourt
had significant success in the state textbook adoption market and in particular
with its new elementary social studies and math programmes and secondary math.
The secondary business again took by far the largest market share in new
textbook adoptions.  The supplemental market declined as traditional
supplemental product gives way to more comprehensive intervention and assessment
products and further investment was made in these.  The new StoryTown elementary
reading programme launched in open territories has been very well received which
bodes well for the major reading adoptions in 2008.

The Assessment business saw revenues 1% lower at constant currencies.  This
reflected the prior year loss of two major state testing contracts, with the
business almost making up the gap with new publishing and contract wins and
extensions.  The turnaround in operational performance is also reflected in
significantly improved profitability.

The sale of the majority of the International business was completed in May 2007
with the remainder completed in August 2007 and January 2008.


FINANCIAL REVIEW

REED ELSEVIER COMBINED BUSINESSES

Currency

The average US dollar exchange rate in 2007 was significantly weaker than in
2006, down 9% against sterling and down 10% against the euro.  The reported
results are therefore significantly impacted by currency translation effects.

Income statement

Revenue from continuing operations (ie excluding Harcourt Education) at £4,584m/
€6,693m increased by 2% expressed in sterling and 1% expressed in euros.  At
constant exchange rates, revenue was 6% higher, both including and excluding
acquisitions and disposals.

Reported figures

Continuing operations

Reported operating profit from continuing operations, after amortisation of
acquired intangible assets and acquisition integration costs, at £888m/€1,296m,
was up 6% in sterling and 5% in euros.  The increase reflects the strong
underlying operating performance, partly offset by currency translation effects.

The amortisation charge in respect of acquired intangible assets, including the
share of amortisation in joint ventures, amounted to £221m/€323m, up £10m/€14m,
principally as a result of recent acquisitions, partly offset by currency
translation effects.

Acquisition integration costs amounted to £20m/€29m (2006: £23m/€34m).
Disposals and other non operating items within continuing operations comprise
gains on disposals of businesses and investments of £65m/€95m and fair value
decreases in the portfolio of venture capital investments of £2m/€3m.

The reported profit before tax, including amortisation of acquired intangible
assets, acquisition integration costs and non operating items, at £812m/€1,185m,
was up 20% expressed in sterling and 19% in euros.

The reported tax credit of £82m/€120m compares with a charge of £86m/€127m in
the prior year.  The current year credit includes the benefit of £223m/€326m in
respect of previously unrecognised deferred tax assets and capital losses
arising in continuing operations, which are realisable as a result of the
disposal of Harcourt Education.  The reported tax credit also reflects movements
on deferred tax balances arising on unrealised exchange differences on long term
inter-affiliate lending.  These deferred tax movements are recognised in the
income statement but are not expected to crystallise in the foreseeable future.

Discontinued operations

The reported operating profit of Harcourt Education of £112m/€164m was up £69m/
€101m on the prior year, principally reflecting the cessation of amortisation of
acquired intangible assets following the disposal announcement.

The gain on the disposal of the Harcourt US Schools business and those Harcourt
International businesses completed in the year was £611m/€849m.  Taxes on the
completed disposals were £380m/€555m, excluding the tax credits included in
continuing operations described above.

Total operations

The reported attributable profit of £1,200m/€1,709m compares with a reported
attributable profit of £623m/€916m in 2006, reflecting the strong operating
performance and the part disposal of Harcourt Education.

Adjusted figures

Adjusted figures are used by Reed Elsevier as additional performance measures
and are stated before amortisation of acquired intangible assets and acquisition
integration costs, and, in respect of earnings, reflect a tax rate that excludes
the effect of movements in deferred taxation assets and liabilities that are not
expected to crystallise in the near term.  Profit and loss on disposals and
other non operating items are also excluded from the adjusted figures.
Comparison at constant exchange rates uses 2006 average and hedge exchange
rates.

Continuing operations

Adjusted operating profit from continuing operations, at £1,137m/€1,660m, was up
5% expressed in sterling and up 4% in euros.  At constant exchange rates,
adjusted operating profits were up 11%, or 10% excluding acquisitions and
disposals.

The net pension expense (including the unallocated net pension financing credit)
was £49m/€72m, down £16m/€24m from 2006, principally reflecting higher returns
on plan assets and curtailments.  The charge for share based payments was £38m/
€55m (2006: £44m/€65m).  Restructuring costs, other than in respect of
acquisition integration, were £16m/€23m (2006: £18m/€26m).

Overall adjusted operating margin for the continuing businesses was up 0.8
percentage points at 24.8% reflecting the good revenue growth and cost
efficiency.  The cycling out of biennial joint venture exhibitions, which
contribute to profit but not to revenues, had a 0.1 percentage point adverse
effect on overall margin growth.  Currency translation mix and the effect of the
science journal currency hedging programme reduced margin by 0.2 percentage
points.  (The net benefit of the Elsevier science journal hedging programme is
lower in 2007 than in 2006 as the effect of the weaker US dollar is incorporated
within the three year rolling hedging programme.)

Net finance costs, at £139m/€203m, were £19m/€30m lower than in the prior year
largely due to currency translation effects and the benefit of proceeds from the
disposal of Harcourt Education.

Adjusted profit before tax from continuing operations was £998m/€1,457m, up 8%
compared to the prior year expressed in sterling and 7% in euros.  At constant
exchange rates, adjusted profit before tax was up 13%.

The effective tax rate on adjusted earnings for the continuing businesses, at
23%, was similar to the rate in 2006.  (The effective tax rate on adjusted
earnings excludes movements in deferred taxation assets and liabilities that are
not expected to crystallise in the near term, and more closely aligns with cash
tax costs.  Adjusted operating profits and taxation are also grossed up for the
equity share of taxes in joint ventures.)

Discontinued operations

Adjusted operating profit from discontinued operations, at £121m/€177m, was down
£8m/€13m, largely as a result of the timing of disposals and currency
translation effects.

Total operations

The adjusted profit attributable to shareholders, including discontinued
operations, was £852m/€1,244m, up 7% compared to the prior year in sterling and
up 6% in euros.  At constant exchange rates, adjusted profit attributable to
shareholders was up 13%.

The effective tax rate on the profit from total operations was 23.6%, slightly
lower than the 24.1% effective rate for 2006.

Cash flows and debt

Adjusted operating cash flow from continuing operations was £1,108m/€1,618m, up
2% in sterling and 1% in euros, and 6% at constant currencies.  The rate of
conversion of adjusted operating profits into cash flow for the continuing
businesses was high at 97% (2006: 100%) reflecting the continued focus on
management of working capital.

Capital expenditure included within adjusted operating cash flow from continuing
operations was £145m/€212m (2006: £167m/€246m), including £80m/€117m in respect
of capitalised development costs included within intangible assets.  Spend on
acquisitions was £327m/€478m (2006: £163m/€240m).  Including deferred
consideration payable, an amount of £262m/€383m was capitalised as acquired
intangible assets and £101m/€147m as goodwill.  Acquisition integration spend in
respect of these and other recent acquisitions amounted to £19m/€28m.  Proceeds
from disposals of businesses and other assets amounted to £86m/€126m.

Free cash flow from continuing operations - after interest and taxation - was
£717m/€1,047m, down £39m/€66m, reflecting higher tax paid than in 2006 which saw
certain tax refunds.  Dividends paid to shareholders in the year amounted to
£416m/€607m (2006: £371m/€545m).  Share repurchases by the parent companies
amounted to £199m/€291m (2006: £217m/€319m).  Additionally, shares of the parent
companies were purchased by the employee benefit trust to meet future
obligations in respect of share based remuneration for £74m/€108m (2006: £68m/
€100m).  Net proceeds from share issuance under share option programmes were
£177m/€258m (2006: £93m/€137m).

Cash proceeds from the sale of discontinued operations in the year were £1,933m/
€2,704m.

Net borrowings at 31 December 2007 were £492m/€669m (2006: £2,314m/€3,448m).
The decrease of £1,822m/€2,779m since 31 December 2006 reflects the proceeds
received from the part disposal of Harcourt Education, proceeds from share
issuances and the benefit of free cash flow, partially offset by dividends,
share buy backs and acquisition spend.  Expressed in sterling, currency
translation differences increased net borrowings by £18m, reflecting the
strengthening of the euro during the year against sterling, mostly offset by the
weakening of the US dollar.  Expressed in euros, currency translation
differences decreased net borrowings by €211m, reflecting the strengthening of
the euro during the year.

Gross borrowings after fair value adjustments at 31 December 2007 amounted to
£3,129m/€4,256m, denominated mostly in US dollars.  The fair value of related
derivatives was £170m/€232m.  Cash balances totalled £2,467m/€3,355m invested in
short term deposits and marketable securities including £1,933m/ €2,704m
proceeds received from the part disposal of Harcourt Education, which were
included in the special distribution to shareholders of the parent companies in
January 2008. After adjusting net debt for the Harcourt disposal proceeds and
taking into account interest rate and currency derivatives, a total of 54% of
Reed Elsevier's gross borrowings (equivalent to 69% of net borrowings) were at
fixed rates and had a weighted average remaining life of 5.5 years and interest
coupon of 5.3%.

The net pension surplus, ie pension assets less pension obligations, at 31
December 2007 was £50m/€68m which compares with a net deficit as at 31 December
2006 of £236m/€351m.  The improvement principally arises from increases in long
term corporate bond yields used to discount scheme obligations.

Capital employed and returns

The capital employed in the continuing businesses at 31 December 2007 was
£7,825m/€10,622m (2006: £7,266m/€10,828m), after adding back accumulated
amortisation of acquired intangible assets and goodwill.  Expressed in sterling,
the increase of £559m principally reflects the impact of acquisitions and
movement of the pension schemes into a net surplus, partially offset by
disposals.  Expressed in euros, the decrease of €206m reflects the impact of
currency translation effects, most particularly the strengthening of the euro
against the US dollar and sterling between 1 January and 31 December 2007,
partially offset by the movements described above.

The return on average capital employed for the continuing businesses in the year
was 11.8% (2006: 11.0%; total operations 9.8%).  This return is based on
adjusted operating profits, less tax at the effective rate, and the average of
the capital employed at the beginning and end of the year retranslated at
average exchange rates.  The improvement in the year reflects the good
underlying profit growth and low capital requirements.

Acquisitions typically dilute the overall return initially, but build quickly to
deliver longer term returns well over Reed Elsevier's average for the business.
The recent acquisitions made in the years 2005 to 2007 are delivering post tax
returns in 2007 of 10%, 7% and proforma 5% respectively and continue to grow
well.


PARENT COMPANIES

For the parent companies, Reed Elsevier PLC and Reed Elsevier NV, adjusted
earnings per share for total operations were respectively up 7% at 35.9p (2006:
33.6p) and 5% at €0.80 (2006: €0.76).  At constant rates of exchange, the
adjusted earnings per share of both companies increased by 12% over the prior
year.

Shares repurchased in the year under the annual share repurchase plan announced
in February 2006 totalled 15.2 million ordinary shares of Reed Elsevier PLC and
11.9 million ordinary shares of Reed Elsevier NV.  Taking into account the
associated financing cost, these share repurchases are estimated to have added
approximately 0.2% to adjusted earnings per share in 2007.

The reported earnings per share for Reed Elsevier PLC shareholders was 49.7p
(2006: 25.6p) and for Reed Elsevier NV shareholders was €1.10 (2006: €0.59).

The equalised final dividends proposed are 13.6p per share for Reed Elsevier PLC
and €0.311 per share for Reed Elsevier NV up 15% and 2% on the prior year
respectively.  This gives total dividends for the year of 18.1p and €0.425, up
14% and 5% on 2006 respectively.  The difference in dividend growth rates
reflects the movement in the euro:sterling exchange rate between dividend
announcement dates.

Dividend cover, based on adjusted earnings per share and the total of the
interim and proposed final dividend for the year, was 2.0 times for Reed
Elsevier PLC and 1.9 times for Reed Elsevier NV.

SUBSEQUENT EVENTS

On 18 January 2008, a special distribution was paid to shareholders in the
equalisation ratio from the estimated net proceeds of the sale of the Harcourt
Education division.  The distribution was 82.0p per share for Reed Elsevier PLC
and €1.767 per share for Reed Elsevier NV and amounted to £2,013m/€2,690m in
aggregate.

The special distribution was accompanied by a consolidation of the ordinary
share capital of Reed Elsevier PLC and Reed Elsevier NV on the basis of 58 new
ordinary shares for every 67 existing ordinary shares.  This represents a 13.4%
consolidation of ordinary share capital, being the aggregate special
distribution expressed as a percentage of the combined market capitalisation of
Reed Elsevier PLC and Reed Elsevier NV (excluding the 5.8% indirect equity
interest in Reed Elsevier NV held by Reed Elsevier PLC), as at the date of the
announcement of the special distribution.

Following the share consolidation, effective 7 January 2008, there were
1,130,473,244 Reed Elsevier PLC ordinary shares of 14 51/116 pence in issue, of
which 46,880,490 were held in treasury including 15,849,192 held by the employee
benefit trust; and 658,127,218 Reed Elsevier NV ordinary shares of €0.07 in
issue, of which 30,584,845 were held in treasury including 8,682,054 held by the
employee benefit trust. Additionally, post share consolidation there were
4,050,720 Reed Elsevier NV R-shares of €0.70 in issue, of which 135,179 were
held in treasury, representing Reed Elsevier PLC's 5.8% indirect equity interest
in Reed Elsevier NV.

For the purposes of calculating earnings per share, the effective date of the
share consolidation is deemed to be 18 January 2008, being the date on which the
special distribution was paid.

On a proforma basis, net debt as at 31 December 2007 adjusted for the special
distribution paid to shareholders on 18 January 2008 would have been £2,505m/
€3,359m.

On 30 January 2008, the sale of Harcourt Assessment and the remaining Harcourt
International businesses, first announced in May 2007, completed following
receipt of regulatory clearance in the United States.  Proceeds received on
disposal were £330m/€449m.

COMBINED FINANCIAL INFORMATION

Combined Income Statement
For the year ended 31 December 2007



                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Revenue - continuing operations                                     4,584       4,509           6,693       6,628
Cost of sales                                                     (1,624)     (1,602)         (2,371)     (2,355)
Gross profit                                                        2,960       2,907           4,322       4,273
Selling and distribution costs                                      (938)       (925)         (1,370)     (1,360)
Administration and other expenses                                 (1,150)     (1,163)         (1,679)     (1,709)
Operating profit before joint ventures                                872         819           1,273       1,204
Share of results of joint ventures                                     16          18              23          27
Operating profit - continuing operations                              888         837           1,296       1,231
Finance income                                                         43          21              63          31
Finance costs                                                       (182)       (179)           (266)       (264)
Net finance costs                                                   (139)       (158)           (203)       (233)
Disposals and other non operating items                                63         (1)              92         (1)
Profit before tax - continuing operations                             812         678           1,185         997
Taxation                                                               82        (86)             120       (127)
Net profit from continuing operations                                 894         592           1,305         870
Net profit from discontinued operations                               309          33             408          49
Net profit for the year                                             1,203         625           1,713         919

Attributable to:
Parent companies' shareholders                                      1,200         623           1,709         916
Minority interests                                                      3           2               4           3
Net profit for the year                                             1,203         625           1,713         919


Net profit from discontinued operations is analysed in note 3.

Adjusted profit figures are presented in note 5 as additional performance
measures.


Combined Cash Flow Statement
For the year ended 31 December 2007


                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Cash flows from operating activities - continuing operations
Cash generated from operations                                      1,218       1,213           1,778       1,782
Interest paid                                                       (174)       (172)           (254)       (253)
Interest received                                                      26          12              38          18
Tax paid                                                            (239)       (165)           (349)       (241)
Net cash from operating activities                                    831         888           1,213       1,306

Cash flows from investing activities - continuing operations
Acquisitions                                                        (327)       (163)           (478)       (240)
Purchases of property, plant and equipment                           (65)        (68)            (95)       (100)
Expenditure on internally developed intangible assets                (80)        (99)           (117)       (146)
Purchase of investments                                               (4)         (9)             (6)        (13)
Proceeds from disposals of property, plant and equipment                4           2               6           3
Proceeds from other disposals                                          82          48             120          70
Dividends received from joint ventures                                 12          16              18          24
Net cash used in investing activities                               (378)       (273)           (552)       (402)

Cash flows from financing activities - continuing operations
Dividends paid to shareholders of the parent companies              (416)       (371)           (607)       (545)
Increase in bank loans, overdrafts and commercial paper               111          72             163         105
Issuance of other loans                                               276         407             403         598
Repayment of other loans                                            (311)       (337)           (454)       (495)
Repayment of finance leases                                          (12)        (12)            (18)        (18)
Proceeds on issue of ordinary shares                                  177          93             258         137
Purchase of treasury shares                                         (273)       (285)           (399)       (419)
Net cash used in financing activities                               (448)       (433)           (654)       (637)

Net cash from discontinued operations                               1,912          57           2,674          84

Increase in cash and cash equivalents                               1,917         239           2,681         351

Movement in cash and cash equivalents
At start of year                                                      519         296             774         432
Increase in cash and cash equivalents                               1,917         239           2,681         351
Exchange translation differences                                       31        (16)           (100)         (9)
At end of year                                                      2,467         519           3,355         774


Net cash from discontinued operations is analysed in note 3.

Adjusted operating cash flow figures are presented in note 5 as additional
performance measures.


Combined Balance Sheet
As at 31 December 2007


                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Non-current assets
Goodwill                                                            2,462       2,802           3,348       4,175
Intangible assets                                                   2,089       2,524           2,841       3,761
Investments in joint ventures                                         116          73             158         108
Other investments                                                     111          50             151          75
Property, plant and equipment                                         239         298             325         444
Net pension assets                                                    183          20             249          30
Deferred tax assets                                                   141         170             192         253
                                                                    5,341       5,937           7,264       8,846
Current assets
Inventories and pre-publication costs                                 271         633             368         943
Trade and other receivables                                         1,148       1,224           1,561       1,824
Derivative financial instruments                                      210         219             286         326
Cash and cash equivalents                                           2,467         519           3,355         774
                                                                    4,096       2,595           5,570       3,867
Assets held for sale                                                  341           -             464           -
Total assets                                                        9,778       8,532          13,298      12,713

Current liabilities
Trade and other payables                                            1,966       1,925           2,674       2,868
Derivative financial instruments                                       22           9              30          14
Borrowings                                                          1,127         921           1,533       1,372
Taxation                                                              752         479           1,023         714
                                                                    3,867       3,334           5,260       4,968
Non-current liabilities
Borrowings                                                          2,002       2,085           2,723       3,107
Deferred tax liabilities                                              695         850             945       1,266
Net pension obligations                                               133         256             181         381
Provisions                                                             21          28              28          42
                                                                    2,851       3,219           3,877       4,796
Liabilities associated with assets held for sale                       84           -             114           -
Total liabilities                                                   6,802       6,553           9,251       9,764
Net assets                                                          2,976       1,979           4,047       2,949

Capital and reserves
Combined share capitals                                               197         191             268         285
Combined share premiums                                             2,143       1,879           2,914       2,800
Combined shares held in treasury                                    (619)       (377)           (842)       (562)
Translation reserve                                                 (145)       (136)           (170)       (201)
Other combined reserves                                             1,389         409           1,862         607
Combined shareholders' equity                                       2,965       1,966           4,032       2,929
Minority interests                                                     11          13              15          20
Total equity                                                        2,976       1,979           4,047       2,949


Approved by the boards of Reed Elsevier PLC and Reed Elsevier NV, 20 February
2008.


Combined statement of recognised income and expense
For the year ended 31 December 2007


                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Net profit for the year                                             1,203         625           1,713         919

Exchange differences on translation of foreign operations            (33)       (244)           (350)       (300)
Actuarial gains on defined benefit pension schemes                    224         139             327         204
Fair value movements on available for sale investments                  -           3               -           4
Fair value movements on cash flow hedges                                3          54               4          79
Tax recognised directly in equity                                    (50)        (60)            (73)        (88)
Net income/(expense) recognised directly in equity                    144       (108)            (92)       (101)

Cumulative exchange differences on disposal of foreign                148           -             206           -
operations
Cumulative fair value movements on disposal of available              (7)           -            (10)           -
for sale investments
Transfer to net profit from hedge reserve (net of tax)               (20)         (5)            (29)         (7)
Total recognised income and expense for the year                    1,468         512           1,788         811

Attributable to:
Parent companies' shareholders                                      1,465         510           1,784         808
Minority interests                                                      3           2               4           3
Total recognised income and expense for the year                    1,468         512           1,788         811



Combined reconciliation of shareholders' equity
For the year ended 31 December 2007


                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Total recognised net income attributable to the parent              1,465         510           1,784         808
companies' shareholders
Dividends declared                                                  (416)       (371)           (607)       (545)
Issue of ordinary shares, net of expenses                             177          93             258         137
Increase in shares held in treasury                                 (273)       (285)           (399)       (419)
Increase in share based remuneration reserve                           46          49              67          72
Net increase/(decrease) in combined shareholders' equity              999         (4)           1,103          53
Combined shareholders' equity at start of year                      1,966       1,970           2,929       2,876
Combined shareholders' equity at end of year                        2,965       1,966           4,032       2,929




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 the Reed Elsevier PLC and
Reed Elsevier NV shareholders and encompasses the businesses of Reed Elsevier
Group plc and Elsevier Reed Finance BV and their respective subsidiaries,
associates and joint ventures, together with the two parent companies, Reed
Elsevier PLC and Reed Elsevier NV ('the combined businesses'). The combined
financial information has been abridged from the audited combined financial
statements for the year ended 31 December 2007, which have been prepared in
accordance with International Financial Reporting Standards ('IFRS') as endorsed
by the European Union and as issued by the International Accounting Standards
Board ('IASB'). Financial information is presented in both sterling and euros.

The Reed Elsevier accounting policies under IFRS are set out in the Reed
Elsevier Annual Reports and Financial Statements 2006 on pages 58 to 61. The
combined financial information has been prepared in accordance with those
accounting policies.

2        Segment analysis

Harcourt Education, which has previously been presented as a separate business
segment, has been classified as a discontinued operation and its results for the
period are presented in note 3.

Revenue
                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Business segment
Elsevier                                                            1,507       1,521           2,200       2,236
LexisNexis                                                          1,594       1,570           2,328       2,308
Reed Business                                                       1,483       1,418           2,165       2,084
Total                                                               4,584       4,509           6,693       6,628
Geographical origin
North America                                                       2,147       2,219           3,135       3,262
United Kingdom                                                        896         828           1,308       1,217
The Netherlands                                                       505         497             737         731
Rest of Europe                                                        708         675           1,034         992
Rest of world                                                         328         290             479         426
Total                                                               4,584       4,509           6,693       6,628
Geographical market
North America                                                       2,233       2,322           3,260       3,413
United Kingdom                                                        603         531             880         781
The Netherlands                                                       206         196             301         288
Rest of Europe                                                        897         866           1,310       1,273
Rest of world                                                         645         594             942         873
Total                                                               4,584       4,509           6,693       6,628



Adjusted operating profit
                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Business segment
Elsevier                                                              477         465             696         683
LexisNexis                                                            406         380             593         559
Reed Business                                                         260         241             380         354
Sub-total                                                           1,143       1,086           1,669       1,596
Corporate costs                                                      (45)        (39)            (66)        (57)
Unallocated net pension credit                                         39          34              57          50
Total                                                               1,137       1,081           1,660       1,589
Geographical origin
North America                                                         505         486             737         715
United Kingdom                                                        211         196             308         288
The Netherlands                                                       181         175             264         257
Rest of Europe                                                        174         169             254         248
Rest of world                                                          66          55              97          81
Total                                                               1,137       1,081           1,660       1,589

Adjusted operating profit figures are presented as additional performance
measures. They are stated before the amortisation of acquired intangible assets
and acquisition integration costs, and are grossed up to exclude the equity
share of taxes in joint ventures. Adjusted figures are reconciled to the
reported figures in note 5. The unallocated net pension credit of £39m/€57m
(2006: £34m/€50m) comprises the expected return on pension scheme assets of
£196m/€286m (2006: £178m/€262m) less interest on pension scheme liabilities of
£157m/€229m (2006: £144m/€212m).

Operating profit
                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Business segment
Elsevier                                                              410         395             598         581
LexisNexis                                                            287         264             419         388
Reed Business                                                         197         183             288         269
Sub-total                                                             894         842           1,305       1,238
Corporate costs                                                      (45)        (39)            (66)        (57)
Unallocated net pension credit                                         39          34              57          50
Total                                                                 888         837           1,296       1,231
Geographical origin
North America                                                         353         329             515         485
United Kingdom                                                        180         167             263         245
The Netherlands                                                       179         172             261         253
Rest of Europe                                                        118         117             172         172
Rest of world                                                          58          52              85          76
Total                                                                 888         837           1,296       1,231

Share of post-tax results of joint ventures of £16m/€23m (2006: £18m/€27m)
included in operating profit comprises £3m/€4m (2006: £3m/€5m) relating to
LexisNexis and £13m/€19m (2006: £15m/€22m) relating to Reed Business.

3        Discontinued operations

Following announcement in February 2007 of the planned sale of Harcourt
Education, the division is presented as a discontinued operation. On 4 May 2007
the sale of the Harcourt Assessment and Harcourt Education International
businesses for $950m was announced, and on 16 July 2007 the sale of the Harcourt
US Schools Education businesses for $4.0bn was announced. All disposals had
completed by 31 December 2007, with the exception of Harcourt Assessment and
certain Harcourt International businesses, the disposal of which completed on 30
January 2008.  Those businesses are presented in the balance sheet as assets
held for sale.

Net profit from discontinued operations
                                                                     2007        2006            2007         2006
                                                                       £m          £m              €m           €m
Revenue                                                               752         889           1,098        1,307
Operating costs                                                     (640)       (846)           (934)      (1,244)
Operating profit and profit before tax                                112          43             164           63
Taxation                                                             (34)        (10)            (50)         (14)
Profit after taxation                                                  78          33             114           49
Gain on disposals                                                     611           -             849            -
Tax on disposals                                                    (380)           -           (555)            -
Net profit from discontinued operations                               309          33             408           49

Operating profit is stated after amortisation of acquired intangible assets of
£9m/€13m (2006: £86m/€127m). The adjusted operating profit, before amortisation
of acquired intangible assets, of the discontinued operations was £121m/€177m
(2006: £129m/€190m).

The gain on disposals of discontinued operations relates to the completed sale
of the Harcourt US Schools Education business and certain of the Harcourt
Education International businesses.  Net assets disposed comprise £318m/€445m of
goodwill, £383m/€537m of intangible assets, £39m/€55m of property, plant and
equipment, £377m/€527m of inventory and £40m/€56m of other net assets.  Tax on
disposals is stated before taking account of tax credits of £223m/€326m in
respect of previously unrecognised deferred tax assets and capital losses.
These have been realised as a result of the disposal of discontinued operations,
but are reported within continuing operations whence they first arose.

Cash flows from discontinued operations
                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Net cash flow from operating activities                                33          86              48         126
Net cash flow from investing activities                             1,879        (29)           2,626        (42)
Net cash flow from financing activities                                 -           -               -           -
Net movement in cash and cash equivalents                           1,912          57           2,674          84


Net cash flow from investing activities includes cash proceeds on the completed
disposals of £1,933m/€2,704m (2006: nil). Cash and cash equivalents disposed was
£7m/€10m (2006: nil).


4        Combined cash flow statement

Reconciliation of operating profit before joint ventures to cash generated from
operations - continuing operations

                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Operating profit before joint ventures                                872         819           1,273       1,204

Amortisation of acquired intangible assets                            219         211             320         309
Amortisation of internally developed intangible assets                 72          66             105          97
Depreciation of property, plant and equipment                          76          81             111         119
Share based remuneration                                               38          44              55          65
Total non cash items                                                  405         402             591         590
Movement in working capital                                          (59)         (8)            (86)        (12)
Cash generated from operations                                      1,218       1,213           1,778       1,782


Reconciliation of net borrowings
                                                            Cash                   Related
                                                               &                derivative
                                                            cash                 financial
                                                     equivalents  Borrowings   instruments        2007        2006
                                                              £m          £m            £m          £m          £m
At start of year                                             519     (3,006)           173     (2,314)     (2,694)

Increase in cash and cash equivalents                      1,917           -             -       1,917         239
Increase in borrowings                                         -        (64)             -        (64)       (130)
Changes resulting from cash flows                          1,917        (64)             -       1,853         109
Inception of finance leases                                    -        (11)             -        (11)         (9)
Fair value adjustments                                         -         (2)             -         (2)           3
Exchange translation differences                              31        (46)           (3)        (18)         277
At end of year                                             2,467     (3,129)           170       (492)     (2,314)

                                                                                   Related
                                                          Cash &                derivative 
                                                            cash                 financial
                                                     equivalents  Borrowings   instruments        2007        2006
                                                              €m          €m            €m          €m          €m
At start of year                                             774     (4,479)           257     (3,448)     (3,933)

Increase in cash and cash equivalents                      2,681           -             -       2,681         351
Increase in borrowings                                         -        (94)             -        (94)       (190)
Changes resulting from cash flows                          2,681        (94)             -       2,587         161
Inception of finance leases                                    -        (16)             -        (16)        (14)
Fair value adjustments                                         -         (3)             -         (3)           5
Exchange translation differences                           (100)         336          (25)         211         333
At end of year                                             3,355     (4,256)           232       (669)     (3,448)


Net borrowings comprise cash and cash equivalents, loan capital, finance leases,
promissory notes, bank and other loans, and those derivative financial
instruments used to hedge the fair value of fixed rate borrowings.


5        Adjusted figures

Reed Elsevier uses adjusted figures as additional performance measures. Adjusted
figures are stated before amortisation of acquired intangible assets,
acquisition integration costs, disposals and other non operating items, related
tax effects and movements in deferred taxation assets and liabilities that are
not expected to crystallise in the near term. Adjusted operating profit is also
grossed up to exclude the equity share of taxes in joint ventures. Adjusted
operating cash flow is measured after net capital expenditure and dividends from
joint ventures but before payments in relation to acquisition integration costs.
Adjusted figures are derived as follows:

Continuing operations
                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Operating profit - continuing operations                              888         837           1,296       1,231
Adjustments:
Amortisation of acquired intangible assets                            221         211             323         309
Acquisition integration costs                                          20          23              29          34
Reclassification of tax in joint ventures                               8          10              12          15
Adjusted operating profit from continuing operations                1,137       1,081           1,660       1,589

Profit before tax - continuing operations                             812         678           1,185         997
Adjustments:
Amortisation of acquired intangible assets                            221         211             323         309
Acquisition integration costs                                          20          23              29          34
Reclassification of tax in joint ventures                               8          10              12          15
Disposals and other non operating items                              (63)           1            (92)           1
Adjusted profit before tax from continuing operations                 998         923           1,457       1,356

Profit attributable to parent companies' shareholders               1,200         623           1,709         916
Net profit from discontinued operations                             (309)        (33)           (408)        (49)
Profit attributable to parent companies' shareholders -               891         590           1,301         867
continuing operations
Adjustments (post tax):
Amortisation of acquired intangible assets                            247         236             361         347
Acquisition integration costs                                          13          16              19          24
Disposals and other non operating items                             (290)        (64)           (423)        (95)
Deferred tax not expected to crystallise in the near term:
Unrealised exchange differences on long term inter                   (21)        (22)            (31)        (32)
affiliate lending
Acquired intangible assets                                           (60)        (56)            (88)        (82)
Other                                                                (15)           6            (22)           9
Adjusted profit attributable to parent companies'                     765         706           1,117       1,038
shareholders from continuing operations

Cash generated from operations                                      1,218       1,213           1,778       1,782
Dividends received from joint ventures                                 12          16              18          24
Purchases of property, plant and equipment                           (65)        (68)            (95)       (100)
Proceeds from disposals of property, plant and equipment                4           2               6           3
Expenditure on internally developed intangible assets                (80)        (99)           (117)       (146)
Payments in relation to acquisition integration costs                  19          22              28          33
Adjusted operating cash flow from continuing operations             1,108       1,086           1,618       1,596


                                                                     2007        2006            2007        2006
                                                                       £m          £m              €m          €m
Operating profit - continuing operations                              888         837           1,296       1,231
Operating profit - discontinued operations                            112          43             164          63
Operating profit - total operations                                 1,000         880           1,460       1,294


Adjustments:
Amortisation of acquired intangible assets                            230         297             336         436
Acquisition integration costs                                          20          23              29          34
Reclassification of tax in joint ventures                               8          10              12          15
Adjusted operating profit from total operations                     1,258       1,210           1,837       1,779

Profit before tax - continuing operations                             812         678           1,185         997
Profit before tax - discontinued operations                           112          43             164          63
Profit before tax - total operations                                  924         721           1,349       1,060
Adjustments:
Amortisation of acquired intangible assets                            230         297             336         436
Acquisition integration costs                                          20          23              29          34
Reclassification of tax in joint ventures                               8          10              12          15
Disposals and other non operating items                              (63)           1            (92)           1
Adjusted profit before tax from total operations                    1,119       1,052           1,634       1,546

Profit attributable to parent companies' shareholders -             1,200         623           1,709         916
total operations
Adjustments (post tax):
Amortisation of acquired intangible assets                            259         324             378         476
Acquisition integration costs                                          13          16              19          24
Disposals and other non operating items                             (521)        (64)           (717)        (95)
Deferred tax not expected to crystallise in the near term:
Unrealised exchange differences on long term inter                   (21)        (22)            (31)        (32)
affiliate lending
Acquired intangible assets                                           (63)        (87)            (92)       (128)
Other                                                                (15)           6            (22)           9
Adjusted profit attributable to parent companies'                     852         796           1,244       1,170
shareholders from total operations

6        Exchange translation rates

In preparing the combined financial information the following exchange rates
have been applied:

                                                                     Income statement               Balance sheet
                                                                     2007        2006            2007        2006
Euro to sterling                                                     1.46        1.47            1.36        1.49
US dollars to sterling                                               2.00        1.84            2.00        1.96
US dollars to euro                                                   1.37        1.25            1.47        1.32


7        Post balance sheet events

On 18 January 2008, Reed Elsevier PLC paid a special distribution of 82.0p per
ordinary share and Reed Elsevier NV paid a special distribution of €1.767 per
ordinary share, from the net proceeds of the disposal of Harcourt Education.
The aggregate special distribution, announced on 12 December 2007, of £2,013m/
€2,690m was recognised when paid in January 2008.

The special distributions were accompanied by a consolidation of the ordinary
share capital of Reed Elsevier PLC and Reed Elsevier NV on the basis of 58 new
ordinary shares for every 67 existing ordinary shares, being the ratio of the
aggregate special distribution to the combined market capitalisation of Reed
Elsevier PLC and Reed Elsevier NV (excluding the 5.8% indirect equity interest
in Reed Elsevier NV held by Reed Elsevier PLC) as at the date of the
announcement of the special distributions.

On 30 January 2008 the sale of Harcourt Assessment and the remaining Harcourt
International businesses, first announced in May 2007, completed following
receipt of regulatory clearance in the United States.  Proceeds received on
disposal were £330m/€449m.

On 20 February 2008, Reed Elsevier approved a plan to divest Reed Business
Information.  In the year to 31 December 2007, Reed Business Information
reported revenues of £906m/€1,323m and adjusted operating profits of £119m/
€174m.

On 20 February 2008, Reed Elsevier entered into a definitive merger agreement
with ChoicePoint, Inc to acquire the company for cash.  Taking into account
$0.6bn of ChoicePoint's estimated net debt, the total value of the transaction
is $4.1bn.

The ChoicePoint board will convene a meeting of ChoicePoint shareholders to
approve the merger and is unanimous in its recommendation of the merger.

The merger is subject to customary regulatory approvals and is expected to be
completed later in the year.  The transaction will be financed initially through
committed new bank facilities, to be later refinanced through the issuance of
term debt.

ChoicePoint provides unique information and analytics to support underwriting
decisions within the property and casualty insurance sector; screening and
authentication services for employment, real estate leasing and customer
enrolment; and public information solutions primarily to banking, professional
services and government customers.  Combination of ChoicePoint with the
LexisNexis' Risk Information and Analytics Group will create a risk management
business with $1.5bn in revenues and a leading position in the fast growing risk
management markets.

REED ELSEVIER PLC

SUMMARY FINANCIAL INFORMATION

Basis of preparation

The Reed Elsevier PLC share of the Reed Elsevier combined results has been
calculated on the basis of the 52.9% economic interest of the Reed Elsevier PLC
shareholders in the Reed Elsevier combined businesses, after taking account of
the results arising in Reed Elsevier PLC and its subsidiary undertakings. The
summary financial information has been prepared on the basis of the group
accounting policies of Reed Elsevier PLC as set out on page 112 of the Reed
Elsevier Annual Reports and Financial Statements 2006, which are in accordance
with International Financial Reporting Standards ('IFRS') as endorsed by the
European Union and as issued by the International Accounting Standards Board ('
IASB'). Reed Elsevier PLC's 52.9% economic interest in the net assets of the
combined businesses is shown in the balance sheet as investments in joint
ventures, net of the assets and liabilities reported as part of Reed Elsevier
PLC and its subsidiary undertakings.

The financial information set out below has been abridged from Reed Elsevier
PLC's consolidated financial statements for the year ended 31 December 2007,
which have been audited and will be filed with the UK Registrar of Companies
following the Annual General Meeting. The audit report was unqualified and did
not contain statements under Sections 237(2) or (3) of the Companies Act 1985.

Consolidated income statement
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    £m          £m
Administrative expenses                                                                            (1)         (2)
Effect of tax credit equalisation on distributed earnings                                         (11)        (10)
Share of results of joint ventures                                                                 658         343
Operating profit                                                                                   646         331
Finance charges                                                                                    (3)         (3)
Profit before tax                                                                                  643         328
Taxation                                                                                          (19)         (8)
Profit attributable to ordinary shareholders                                                       624         320

Earnings per ordinary share
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                 pence       pence
Basic earnings per share
From continuing operations of the combined businesses                                            36.6p       24.1p
From discontinued operations of the combined businesses                                          13.1p        1.5p
From total operations of the combined businesses                                                 49.7p       25.6p
Diluted earnings per share
From continuing operations of the combined businesses                                            36.2p       23.8p
From discontinued operations of the combined businesses                                          12.9p        1.5p
From total operations of the combined businesses                                                 49.1p       25.3p

Adjusted profit and earnings per share figures are presented in note 1 as
additional performance measures.


Consolidated cash flow statement
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    £m          £m
Cash flows from operating activities
Cash used by operations                                                                            (2)         (2)
Interest paid                                                                                      (3)         (3)
Tax paid                                                                                          (16)         (6)
Net cash used in operating activities                                                             (21)        (11)

Cash flows from investing activities
Dividends received from joint ventures                                                             850         596

Cash flows from financing activities
Equity dividends paid                                                                            (206)       (186)
Proceeds on issue of ordinary shares                                                                92          47
Purchase of treasury shares                                                                       (92)       (112)
Repayment of loan from joint ventures                                                             (36)           -
Increase in net funding balances due from joint ventures                                         (587)       (334)
Net cash used in financing activities                                                            (829)       (585)

Movement in cash and cash equivalents                                                                -           -



Consolidated balance sheet
As at 31 December 2007


                                                                                                  2007        2006
                                                                                                    £m          £m
Non-current assets
Investments in joint ventures                                                                    1,584       1,090
Total assets                                                                                     1,584       1,090
Current liabilities
Amounts owed to joint ventures                                                                       -          36
Payables                                                                                             -           1
Taxation                                                                                            16          13
Total liabilities                                                                                   16          50
Net assets                                                                                       1,568       1,040
Capital and reserves
Called up share capital                                                                            163         161
Share premium account                                                                            1,123       1,033
Shares held in treasury (including in joint ventures)                                            (302)       (200)
Capital redemption reserve                                                                           4           4
Translation reserve                                                                               (37)        (98)
Other reserves                                                                                     617         140
Total equity                                                                                     1,568       1,040


Approved by the board of directors, 20 February 2008.


Consolidated statement of recognised income and expense
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    £m          £m
Profit attributable to ordinary shareholders                                                       624         320
Share of joint ventures' net income/(expense) recognised directly in equity                         77        (57)
Share of joint ventures' cumulative exchange differences on disposal of foreign operations          78           -
Share of joint ventures' cumulative fair value movements on disposal of available for sale         (4)           -
investments
Share of joint ventures' transfer to net profit from hedge reserve                                (11)         (3)
Total recognised net income and expense for the year                                               764         260



Consolidated reconciliation of shareholders' equity
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    £m          £m
Total recognised net income                                                                        764         260
Equity dividends declared                                                                        (206)       (186)
Issue of ordinary shares, net of expenses                                                           92          47
Increase in shares held in treasury (including in joint ventures)                                (130)       (151)
Increase in share based remuneration reserve                                                        24          26
Equalisation adjustments                                                                          (16)           2
Net increase/(decrease) in shareholders' equity                                                    528         (2)
Shareholders' equity at start of year                                                            1,040       1,042
Shareholders' equity at end of year                                                              1,568       1,040



Notes to the summary financial information

1         Adjusted figures

Adjusted profit and earnings per share figures are used as additional
performance measures. Adjusted earnings per share is based upon the Reed
Elsevier PLC shareholders' 52.9% economic interest in the adjusted profit
attributable of the Reed Elsevier combined businesses, which is reconciled to
the reported figures in note 5 to the combined financial information. The
adjusted figures are derived as follows:

Earnings per share from total operations of the combined businesses

                                                                   Profit attributable to          Basic earnings
                                                                    ordinary shareholders               per share
                                                                         2007        2006        2007        2006
                                                                           £m          £m       pence       pence
Reported figures                                                          624         320       49.7p       25.6p
Effect of tax credit equalisation on distributed earnings                  11          10        0.8p        0.8p
Profit attributable to ordinary shareholders based on 52.9%               635         330       50.5p       26.4p
economic interest in the Reed Elsevier combined businesses
Share of adjustments in joint ventures                                  (184)          91     (14.6)p        7.2p
Adjusted figures                                                          451         421       35.9p       33.6p


Earnings per share from the continuing operations of the combined businesses

                                                                   Profit attributable to          Basic earnings
                                                                    ordinary shareholders               per share
                                                                         2007        2006        2007        2006
                                                                           £m          £m       pence       pence
Reported figures                                                          624         320       49.7p       25.6p
Share of joint ventures' net profit from discontinued operations        (164)        (18)     (13.1)p      (1.5)p
Profit attributable to ordinary shareholders based on the                 460         302       36.6p       24.1p
continuing operations of the combined businesses



2        Equity dividends
Dividends declared in the year                                       2007        2006            2007        2006
                                                                    pence       pence              £m          £m
Ordinary shares
Final for prior financial year                                      11.8p       10.7p             149         135
Interim for financial year                                           4.5p        4.1p              57          51
Total                                                               16.3p       14.8p             206         186


The Directors of Reed Elsevier PLC have proposed a final dividend of 13.6p
(2006: 11.8p). The cost of the final dividend, if approved by shareholders, is
expected to be £147m. No liability has been recognised at the balance sheet
date. The Reed Elsevier PLC final dividend as approved will be paid on 16 May
2008, with ex-dividend and record dates of 30 April 2008 and 2 May 2008
respectively. Dividends paid to Reed Elsevier PLC and Reed Elsevier NV
shareholders are equalised at the gross level inclusive of the UK tax credit
received by certain Reed Elsevier PLC shareholders. The equalisation adjustment
equalises the benefit of the tax credit between the two sets of shareholders in
accordance with the equalisation agreement.


Dividends paid and proposed relating to the financial year                                        2007        2006
                                                                                                 pence       pence
Ordinary shares
Interim (paid)                                                                                    4.5p        4.1p
Final (proposed)                                                                                 13.6p       11.8p
Total                                                                                            18.1p       15.9p


3        Share capital and treasury shares
                                                                                                 2007        2006
                                                                                            Shares in   Shares in
                                                                                         issue net of   issue net
                                                                   Shares in    Treasury     treasury of treasury
                                                                       issue      shares       shares      shares
                                                                    millions    millions     millions    millions
Number of ordinary shares
At start of year                                                     1,287.4      (37.8)      1,249.6     1,266.2
Issue of ordinary shares                                                18.5           -         18.5        10.4
Share repurchases                                                          -      (15.2)       (15.2)      (20.6)
Net purchase of shares by employee benefit trust                           -       (1.6)        (1.6)       (6.4)
At end of year                                                       1,305.9      (54.6)      1,251.3     1,249.6
Average number of ordinary shares during the year                                             1,256.5     1,251.9


4        Contingent liabilities

There are contingent liabilities in respect of borrowings of joint ventures
guaranteed jointly and severally by Reed Elsevier PLC and Reed Elsevier NV
amounting to £2,759m at 31 December 2007 (2006: £2,589m).


5        Post balance sheet events

On 18 January 2008, the company paid a special distribution of 82.0p per
ordinary share from the net proceeds of the disposal of Harcourt Education.  The
distribution, announced on 12 December 2007, of £1,041m was recognised when paid
in January 2008.

The special distribution was accompanied by a consolidation of ordinary share
capital on the basis of 58 new ordinary shares of 14 51/116p for every 67
existing ordinary shares of 12.5p, being the ratio of the aggregate special
distribution (including that paid by Reed Elsevier NV) to the combined market
capitalisation of Reed Elsevier PLC and Reed Elsevier NV (excluding the 5.8%
indirect equity interest in Reed Elsevier NV held by Reed Elsevier PLC) as at
the date of the announcement of the special distribution.

Following the share consolidation, effective 7 January 2008, there were
1,130,473,244 Reed Elsevier PLC ordinary shares of 14 51/116p in issue, of which
46,880,490 were held in treasury including 15,849,192 held by the Reed Elsevier
Group plc employee benefit trust. For the purposes of calculating earnings per
share, the effective date of the share consolidation is deemed to be 18 January
2008, being the date on which the special distribution was paid.

On 30 January 2008 the sale of Harcourt Assessment and the remaining Harcourt
International businesses, first announced in May 2007, completed following
receipt of regulatory clearance in the United States.  Proceeds received on
disposal by the Reed Elsevier combined businesses were £330m.

On 20 February 2008, Reed Elsevier approved a plan to divest Reed Business
Information.  In the year to 31 December 2007, Reed Business Information
reported revenues of £906m and adjusted operating profits of £119m.

On 20 February 2008, Reed Elsevier entered into a definitive merger agreement
with ChoicePoint, Inc to acquire the company for cash.  Taking into account
$0.6bn of ChoicePoint's estimated net debt, the total value of the transaction
is $4.1bn.  The ChoicePoint board will convene a meeting of ChoicePoint
shareholders to approve the merger and is unanimous in its recommendation of the
merger.  The merger is subject to customary regulatory approvals and is expected
to be completed later in the year.

REED ELSEVIER NV

SUMMARY FINANCIAL INFORMATION

Basis of preparation

The Reed Elsevier NV share of the Reed Elsevier combined results has been
calculated on the basis of the 50% economic interest of the Reed Elsevier NV
shareholders in the Reed Elsevier combined businesses, after taking account of
the results arising in Reed Elsevier NV and its subsidiary undertakings. The
summary financial information has been prepared on the basis of the group
accounting policies of Reed Elsevier NV as set out on page 130 of the Reed
Elsevier Annual Reports and Financial Statements 2006, which are in accordance
with International Financial Reporting Standards ('IFRS') as endorsed by the
European Union and as issued by the International Accounting Standards Board 
('IASB'). Reed Elsevier NV's 50% economic interest in the net assets of the
combined businesses is shown in the balance sheet as investments in joint
ventures, net of the assets and liabilities reported as part of Reed Elsevier NV
and its subsidiary undertakings.

The financial information in respect of the year ended 31 December 2007 has been
abridged from the consolidated financial statements of Reed Elsevier NV which
have been audited and will be filed with the Chamber of Commerce following the
Annual General Meeting.  The audit report was unqualified.

Consolidated income statement
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    €m          €m
Administrative expenses                                                                            (3)         (3)
Share of results of joint ventures                                                                 803         455
Operating profit                                                                                   800         452
Finance income                                                                                      73           7
Profit before tax                                                                                  873         459
Taxation                                                                                          (18)         (1)
Profit attributable to ordinary shareholders                                                       855         458

Earnings per ordinary share
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                     €           €
Basic earnings per share
From continuing operations of the combined businesses                                            €0.84       €0.56
From discontinued operations of the combined businesses                                          €0.26       €0.03
From total operations of the combined businesses                                                 €1.10       €0.59
Diluted earnings per share
From continuing operations of the combined businesses                                            €0.83       €0.56
From discontinued operations of the combined businesses                                          €0.26       €0.03
From total operations of the combined businesses                                                 €1.09       €0.59

Adjusted profit and earnings per share figures are presented in note 1 as
additional performance measures.

Consolidated cash flow statement
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    €m          €m
Cash flows from operating activities
Cash used by operations                                                                            (2)         (3)
Interest received                                                                                   71          12
Tax paid                                                                                          (18)         (1)
Net cash from operating activities                                                                  51           8

Cash flows from investing activities
Dividends received from joint ventures                                                           1,410       1,111

Cash flows from financing activities
Equity dividends paid                                                                            (310)       (272)
Proceeds on issue of ordinary shares                                                               124          68
Purchase of treasury shares                                                                      (176)       (156)
Increase in net funding balances due from joint ventures                                       (1,238)       (612)
Net cash used in financing activities                                                          (1,600)       (972)

Movement in cash and cash equivalents                                                            (139)         147



Consolidated balance sheet
As at 31 December 2007


                                                                                                  2007        2006
                                                                                                    €m          €m
Non-current assets
Investments in joint ventures                                                                    2,075       1,386
Current assets
Amounts due from joint ventures - other                                                              5           3
Cash and cash equivalents                                                                            9         148
                                                                                                    14         151
Total assets                                                                                     2,089       1,537
Current liabilities
Payables                                                                                             9           8
Taxation                                                                                            64          64
Total liabilities                                                                                   73          72
Net assets                                                                                       2,016       1,465
Capital and reserves
Share capital issued                                                                                49          48
Paid-in surplus                                                                                  1,685       1,562
Shares held in treasury (including in joint ventures)                                            (459)       (282)
Translation reserve                                                                              (129)        (70)
Other reserves                                                                                     870         207
Total equity                                                                                     2,016       1,465


Approved by the combined board of directors, 20 February 2008.


Consolidated statement of recognised income and expense
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    €m          €m
Profit attributable to ordinary shareholders                                                       855         458
Share of joint ventures' net expense recognised directly in equity                                (45)        (50)
Share of joint ventures' cumulative exchange differences on disposal of foreign operations         103           -
Share of joint ventures' cumulative fair value movements on disposal of available for sale         (5)           -
investments
Share of joint ventures' transfer to net profit from hedge reserve                                (15)         (4)
Total recognised net income and expense for the year                                               893         404



Consolidated reconciliation of shareholders' equity
For the year ended 31 December 2007


                                                                                                  2007        2006
                                                                                                    €m          €m
Total recognised net income for the year                                                           893         404
Equity dividends declared                                                                        (310)       (272)
Issue of ordinary shares, net of expenses                                                          124          68
Increase in shares held in treasury (including in joint ventures)                                (200)       (210)
Increase in share based remuneration reserve                                                        34          36
Equalisation adjustments                                                                            10           1
Net increase in shareholders' equity                                                               551          27
Shareholders' equity at start of year                                                            1,465       1,438
Shareholders' equity at end of year                                                              2,016       1,465



Notes to the summary financial information



1        Adjusted figures

Adjusted profit and earnings per share figures are used as additional
performance measures. Adjusted earnings per share is based upon the Reed
Elsevier NV shareholders' 50% economic interest in the adjusted profit
attributable of the Reed Elsevier combined businesses, which is reconciled to
the reported figures in note 5 to the combined financial information. The
adjusted figures are derived as follows:

Earnings per share from total operations of the combined businesses

                                                                   Profit attributable to          Basic earnings
                                                                    ordinary shareholders               per share
                                                                         2007        2006        2007        2006
                                                                           €m          €m           €           €
Reported figures                                                          855         458       €1.10       €0.59
Share of adjustments in joint ventures                                  (233)         127     €(0.30)       €0.17
Adjusted figures                                                          622         585       €0.80       €0.76


Earnings per share from the continuing operations of the combined businesses

                                                                   Profit attributable to          Basic earnings
                                                                    ordinary shareholders               per share
                                                                         2007        2006        2007        2006
                                                                           €m          €m           €           €
Reported figures                                                          855         458       €1.10       €0.59
Share of joint ventures' net profit from discontinued operations        (204)        (24)     €(0.26)     €(0.03)
Profit attributable to ordinary shareholders based on the                 651         434       €0.84       €0.56
continuing operations of the combined businesses


2        Equity dividends

Dividends declared in the year                                       2007        2006            2007        2006
                                                                        €           €              €m          €m
Ordinary shares
Final for prior financial year                                     €0.304      €0.267             225         197
Interim for financial year                                         €0.114      €0.102              85          75
R-shares                                                                -           -               -           -
Total                                                              €0.418      €0.369             310         272


The Directors of Reed Elsevier NV have proposed a final dividend of €0.311
(2006: €0.304). The cost of the final dividend, if approved by shareholders, is
expected to be €195m. No liability has been recognised at the balance sheet
date. The Reed Elsevier NV final dividend as approved will be paid on 16 May
2008, with ex-dividend and record dates of 28 April 2008 and 30 April 2008
respectively. Dividends paid to Reed Elsevier PLC and Reed Elsevier NV
shareholders are equalised at the gross level inclusive of the UK tax credit
received by certain Reed Elsevier PLC shareholders.

Dividends paid and proposed relating to the financial year                                        2007        2006
                                                                                                     €           €
Ordinary shares
Interim (paid)                                                                                  €0.114      €0.102
Final (proposed)                                                                                €0.311      €0.304
R-shares                                                                                             -           -
Total                                                                                           €0.425      €0.406


3        Share capital and treasury shares
                                                                                                 2007        2006
                                                                                            Shares in   Shares in
                                                                                         issue net of   issue net
                                                                   Shares in    Treasury     treasury of treasury
                                                                       issue      shares       shares      shares
                                                                    millions    millions     millions    millions
Number of ordinary shares
At start of year                                                       748.6      (22.6)        726.0       736.3
Issue of ordinary shares                                                11.7           -         11.7         6.8
Share repurchases                                                          -      (11.9)       (11.9)      (13.4)
Net purchase of shares by employee benefit trust                           -       (0.9)        (0.9)       (3.7)
At end of year                                                         760.3      (35.4)        724.9       726.0
Average number of equivalent ordinary shares during the year                                    774.9       772.1


4        Contingent liabilities

There are contingent liabilities in respect of borrowings of joint ventures
guaranteed jointly and severally by Reed Elsevier NV and Reed Elsevier PLC
amounting to €3,745m at 31 December 2007 (2006: €3,858m).


5        Post balance sheet events

On 18 January 2008, the company paid a special distribution of €1.767 per
ordinary share from the net proceeds of the disposal of Harcourt Education.  The
distribution, announced on 12 December 2007, of €1,299m was recognised when paid
in January 2008.

The special distribution was accompanied by a consolidation of ordinary share
capital on the basis of 58 new ordinary shares of  €0.07 for every 67 existing
ordinary shares of €0.06, being the ratio of the aggregate special distribution
(including that paid by Reed Elsevier PLC) to the combined market capitalisation
of Reed Elsevier NV and Reed Elsevier PLC (excluding the 5.8% indirect equity
interest in Reed Elsevier NV held by Reed Elsevier PLC) as at the date of the
announcement of the special distribution.  The existing R-shares of €0.60 were
consolidated on a similar basis into new R-shares of €0.70.

Following the share consolidation, effective 7 January 2008, there were
658,127,218 Reed Elsevier NV ordinary shares of €0.07 in issue, of which
30,584,845 were held in treasury including 8,682,054 held by the Reed Elsevier
Group plc employee benefit trust.  Additionally, post share consolidation there
were 4,050,720 Reed Elsevier NV R-shares of €0.70 in issue, of which 135,179
were held in treasury. For the purposes of calculating earnings per share, the
effective date of the share consolidation is deemed to be 18 January 2008, being
the date on which the special distribution was paid.

On 30 January 2008 the sale of Harcourt Assessment and the remaining Harcourt
International businesses, first announced in May 2007, completed following
receipt of regulatory clearance in the United States.  Proceeds received on
disposal by the Reed Elsevier combined businesses were €449m.

On 20 February 2008, Reed Elsevier approved a plan to divest Reed Business
Information. In the year to 31 December 2007, Reed Business Information reported
revenues of €1,323m and adjusted operating profits of €174m.

On 20 February 2008, Reed Elsevier entered into a definitive merger agreement
with ChoicePoint, Inc to acquire the company for cash.  Taking into account
$0.6bn of ChoicePoint's estimated net debt, the total value of the transaction
is $4.1bn.  The ChoicePoint board will convene a meeting of ChoicePoint
shareholders to approve the merger and is unanimous in its recommendation of the
merger.  The merger is subject to customary regulatory approvals and is expected
to be completed later in the year.


ADDITIONAL INFORMATION FOR US INVESTORS

Summary financial information in US dollars

This summary financial information in US dollars is a simple translation of the
Reed Elsevier combined financial information into US dollars at the rates of
exchange set out in note 6 to the combined financial information. The financial
information provided below is prepared in accordance with accounting principles
as used in the preparation of the Reed Elsevier combined financial information.
It does not represent a restatement under US Generally Accepted Accounting
Principles ('US GAAP'), which would be different in some significant respects.

Combined income statement
                                                                                                  2007        2006
                                                                                                  US$m        US$m
Revenue - continuing operations                                                                  9,168       8,297
Operating profit - continuing operations                                                         1,776       1,540
Profit before tax - continuing operations                                                        1,624       1,248
Net profit from discontinued operations                                                            618          61
Net profit attributable to parent companies' shareholders - total operations                     2,400       1,146
Adjusted operating profit - continuing operations                                                2,274       1,989
Adjusted profit attributable to parent companies' shareholders - total operations                1,704       1,465
Basic earnings per American Depositary Share (ADS) - total operations                              US$         US$
Reed Elsevier PLC (Each ADS comprises four ordinary shares)                                      $3.98       $1.88
Reed Elsevier NV (Each ADS comprises two ordinary shares)                                        $3.01       $1.48
Adjusted earnings per American Depositary Share (ADS) - total operations
Reed Elsevier PLC (Each ADS comprises four ordinary shares)                                      $2.87       $2.47
Reed Elsevier NV (Each ADS comprises two ordinary shares)                                        $2.19       $1.90

Adjusted earnings per American Depository Share is based on Reed Elsevier PLC
shareholders' 52.9% and Reed Elsevier NV's 50% respective share of the adjusted
profit attributable of the Reed Elsevier combined businesses. Adjusted figures
are presented as additional performance measures and are reconciled to the
reported figures at their sterling and euro amounts in note 6 to the combined
financial information and in note 1 to the summary financial information of each
of the two parent companies.

Combined cash flow statement
                                                                                                  2007        2006
                                                                                                  US$m        US$m
Net cash from operating activities - continuing operations                                       1,662       1,634
Net cash used in investing activities - continuing operations                                    (756)       (503)
Net cash used in financing activities - continuing operations                                    (896)       (796)
Net cash from discontinued operations                                                            3,824         105
Increase in cash and cash equivalents                                                            3,834         440
Adjusted operating cash flow - continuing operations                                             2,216       1,998

Combined balance sheet
                                                                                                  2007        2006
                                                                                                  US$m        US$m
Non-current assets                                                                              10,682      11,637
Current assets                                                                                   8,192       5,086
Assets held for sale                                                                               682           -
Total assets                                                                                    19,556      16,723
Current liabilities                                                                              7,734       6,535
Non-current liabilities                                                                          5,702       6,309
Liabilities associated with assets held for sale                                                   168           -
Total liabilities                                                                               13,604      12,844
Net assets                                                                                       5,952       3,879


Both Reed Elsevier PLC ('RUK', CUSIP No. 758205207) and Reed Elsevier NV ('ENL',
CUSIP No. 758204200) have American Depositary Shares (ADSs) listed on the New
York Stock Exchange (Depositary: Bank of New York NA). An ADS in Reed Elsevier
NV represents two ordinary shares in Reed Elsevier NV, while a Reed Elsevier PLC
ADS represents four ordinary shares in Reed Elsevier PLC. Final dividends on
Reed Elsevier PLC and Reed Elsevier NV ADSs will be paid on 23 May 2008.


INVESTOR INFORMATION

Notes for Editors

Reed Elsevier is a world leading publisher and information provider and its
principal operations are in North America and Europe. Its two parent companies -
Reed Elsevier PLC and Reed Elsevier NV - are listed on the London and Amsterdam
Stock Exchanges respectively, and also on the New York Stock Exchange. The
returns to their respective shareholders are equalised in terms of dividend and
capital rights. 'Reed Elsevier' and 'the combined businesses' comprise Reed
Elsevier PLC and Reed Elsevier NV plus their two jointly owned companies, Reed
Elsevier Group plc and Elsevier Reed Finance BV, and their respective
subsidiaries and joint ventures.

The Reed Elsevier PLC 2007 Annual Report and Financial Statements are being
posted to Reed Elsevier PLC shareholders on 14 March 2008. Copies of the Reed
Elsevier PLC and Reed Elsevier NV 2007 Annual Report and Financial Statements
will be available to shareholders in Reed Elsevier NV on request. Copies of the
Preliminary Statement are available to the public from the respective companies:

Reed Elsevier PLC                                      Reed Elsevier NV
1-3 Strand                                             Radarweg 29
London WC2N 5JR                                        1043 NX Amsterdam
United Kingdom                                         The Netherlands

Copies of all recent announcements, including this Preliminary Announcement, and
additional information on Reed Elsevier can be found on the Reed Elsevier Home 
Page on the World Wide Web: http://www.reedelsevier.com

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                   

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