Notes to the Accounts

3. Analysis of consolidated profit and loss account

	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.

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).