Selected Explanatory Notes

Statement of compliance

These condensed consolidated financial statements do not include all of the information required for full annual financial statements, and have been prepared in accordance with IFRS and its interpretations, including International Accounting Standards (IAS) as adopted by the International Accounting Standards Board (IASB) and as endorsed for use in the European Union by the European Commission. The accounting policies applied in these condensed consolidated financial statements are the same as those applied in the 2011 Annual Report, which will be published on March 13, 2012.

Accounting policies

There were no relevant new accounting standards, amendments and interpretations that became effective from January 1, 2011 that have a material impact on the Group’s results and equity.

Estimates

The preparation of condensed consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses. Actual results may differ from those estimates and judgments. In preparing these condensed consolidated financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to Wolters Kluwer’s 2011 Annual Report. The estimates, judgments and underlying assumptions are being continually evaluated and based on historic experience and other factors, including expectations of future events believed to be reasonable under the circumstances.

Benchmark figures

Wherever used in this press release, the term “ordinary” refers to figures adjusted for non-benchmark items and, where applicable, impairment of goodwill and impairment and amortization of publishing rights.

Non-benchmark items relate to expenses arising from circumstances or transactions that, given their size or nature, are clearly distinct from the ordinary activities of the Group and are excluded from the benchmark figures: springboard costs, restructuring costs, acquisition integration costs, and acquisition related costs as included in operating profit and fair value changes of contingent acquisition considerations in financing results. “Ordinary” figures are non-IFRS compliant financial figures, but are internally regarded as key performance indicators to measure the underlying performance of the base business. These figures are presented as additional information and do not replace the information in the statement of income and in the statement of cash flows. The term “ordinary” is not a defined term under International GAAP.

Special items contained in the condensed consolidated financial statements

Discontinued operations

On July 27, 2011, Wolters Kluwer announced the planned sale of its pharma business. The Health division will focus on its leading positions in professional information and clinical decisions support going forward. The majority of the pharma business is included in the Health division. The operations of the pharma business have been presented as discontinued operations. Prior year amounts in the statement of income and statement of cash flows have been re-presented.

Seasonality

Some of the businesses are impacted by seasonal purchasing patterns. Revenues of Wolters Kluwer’s tax and regulatory businesses are strongest in the fourth and first quarters, in line with statutory (tax) filing requirements. The Health business also has strong fourth-quarter sales due to the buying behavior of key wholesalers that serve the education and professional markets. The cash flow is typically strongest in the fourth quarter as calendar-year subscription renewals are received.

Acquisitions and disposals

Acquisitions

Total acquisition spending in 2011 was €299 million (2010: €251 million), including payments of €8 million for acquisitions made in previous years (2010: €3 million) and €43 million for acquired tax benefits. Acquisition related costs amounted to €9 million in 2011 (2010: €8 million).

Acquisitions completed in 2011 contributed €42 million in revenues and €8 million in ordinary EBITA to 2011 results and had annualized revenues of €90 million and ordinary EBITA of €22 million. The principal acquisitions in 2011 included: NRAI in Legal & Regulatory; TopPower and Twinfield in Tax & Accounting; Lexicomp in Health; and Spring and SASGAS in Financial & Compliance Services.

The fair value of the identifiable assets and liabilities of some acquisitions could only be determined provisionally and will be subject to change based on the outcome of the purchase price allocation which will be completed within 12 months from the acquisition date.

The goodwill recorded in connection with the 2011 acquisitions represents future economic benefits specific to Wolters Kluwer arising from assets that do not qualify for separate recognition as intangible assets. This includes amongst others synergies in skilled workforce and technology costs, the leverage of know-how, the opportunity to portfolio enrichment, the benefits of high barriers of key source information, and complete penetration in the area of information provisioning in certain markets.

Amortization and impairments

Amortization and impairments increased in 2011 mainly due to amortization of additions in intangibles assets from acquisitions in 2011 and 2010.

Results from discontinued operations include an impairment loss of €112 million of goodwill and publishing rights.

Issuances, repurchases, and repayments of debt and equity securities, and dividends paid

In 2011, the company executed a share buy-back program of €100 million. The company repurchased 7.2 million of ordinary shares under this program at an average stock price of €13.88.

In 2011, 2,394,480 shares were issued for the stock dividend and 606,975 shares for the vesting of Long-Term Incentive Plan (LTIP) shares. The annual cash dividend of €127 million was paid in May 2011. Of the 2010 dividend of €0.67 per share, 63.7% was distributed as cash dividend (2009: 59.5%).

Under the LTIP 2011-13, 1,430,187 shares were conditionally awarded to the Executive Board and other senior managers of the company in 2011. In 2011, 215,183 shares were forfeited under the running long-term incentive plans.

The LTIP 2008-10 plan vested on December 31, 2010. Total Shareholder Return (TSR) ranked tenth relative to its peer group of 15 companies, resulting in a pay-out of 0% of the conditional base number of shares awarded to the Executive Board and a pay-out of 75% to the senior executives. As a result, 635,475 shares were released on February 24, 2011.

The LTIP 2009-11 plan vested on December 31, 2011. Total Shareholder Return (TSR) ranked eleventh relative to its peer group of 15 companies, resulting in a pay-out of 0% of the conditional base number of shares awarded to the Executive Board and a pay-out of 50% of the conditional base number of shares awarded to senior executives which equals a total number of 403,075 shares. The shares will be released on February 23, 2012.

In 2011, the final number of 20,000 outstanding share options was exercised, for a total value of €0.3 million that was received by the company.

Net debt

Year end net debt increased to €2,168 million (2010: €2,035 million) as cash spend on acquisitions, cash dividends, and the share buy-back was partly offset by ordinary free cash flow of €443 million. The net-debt-to-EBITDA ratio increased to 3.1. Excluding the exceptional charge for Springboard, net debt to EBITDA ratio was 2.7. The Group expects this ratio to reduce to 2.5 over the medium term.

Net debt is defined as the sum of long term loans, borrowings and bank overdrafts, and deferred acquisition payments minus cash and cash equivalents, divestment receivables, and the net fair value of derivative financial instruments.

Taxation

The effective tax rate on ordinary income before tax (continuing operations) was 26.8% (2010: 25.6%), as the share of profits from higher tax regions such as the U.S. increased.