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  Pearson Annual Report 1998    

Notes to the Accounts

   
 

3. Analysis of consolidated profit and loss account

 

  1998 1997



ALL FIGURES IN MILLIONS continuing discontinued total continuing discontinued total
               
Cost of sales (1,138) (38) (1,176) (1,003) (111) (1,114)



Distribution costs (168) (1) (169) (123) (3) (126)
Administration and other expenses (848) (85) (933) (701) (143) (844)
Other operating income (see below) 79 3 82 68 4 72



Net operating expenses (937) (83) (1,020) (756) (142) (898)



Analysed as:    
Net operating expenses –
before exceptional items and goodwill amortisation
(854) (83) (937) (726) (138) (864)
Net operating expenses –
exceptional items
(71) (71) (30) (4) (34)
Net operating expenses –
goodwill amortisation
(12) (12)



Net operating expenses (937) (83) (1,020) (756) (142) (898)



NOTE: The following amounts are included in the 1998 totals in respect of acquisitions: cost of sales £74m and net operating expenses £95m. The exceptional expense of £120m in 1998 is included within cost of sales £49m and administration and other expenses £71m (see note 2). The exceptional expense of £34m in 1997 is included within administration and other expenses.

 

  1998 1997

ALL FIGURES IN MILLIONS


     
Other operating income    
Income from other investments:    
Listed 2
Unlisted 14 13
BSBH loan stock interest 4 4
Other operating income (mainly royalties,
rights and commission income)
64 53



  82 72



Profit before taxation is stated after charging:    
Depreciation 66 65
Operating lease rentals:    
Plant and machinery 17 12
Properties 41 36
Year 2000 costs 7
Auditors’ remuneration:    
Audit 2 2
Non-audit – UK – PricewaterhouseCoopers
(Company £nil; 1997: £nil)
2 2
Non-audit – Other – PricewaterhouseCoopers 2



NOTE: Non-audit fees of £4m for PricewaterhouseCoopers in 1998 include £3m paid to Price Waterhouse and £1m paid to Coopers & Lybrand prior to the date of appointment of PricewaterhouseCoopers as auditors. Non-audit fees in 1997 comprise solely amounts paid to the previous auditors Price Waterhouse. In addition to the non-audit fees (UK) of £2m (1997:£2m), consultancy fees of £7m (1997:£8m) have been incurred in respect of the Shared Services initiative. These fees have been capitalised. Fees of £2m were also incurred in the UK in respect of acquisitions and disposals. These fees have also been capitalised. Audit fees of the Company amounted to £0.1m (1997: £0.1m).

1998 Annual Report
* Introduction
* Chairman's statement
* Chief Executive's review
* Financial Review
* Financial Policy
* Report of the directors
* Personnel committee report
* Auditors' report
* Consolidated profit and loss account
* Consolidated balance sheet
* Consolidated statement of cash flows
* Statement of total recognised gains and losses
* Note of historical cost profits and losses
* Reconciliation of movements in equity shareholders' funds
* Principal subsidiaries and associates
* Five year summary
* Shareholder information
   
* Notes to the accounts

 

 

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