GSK Annual Report 2002

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100 GlaxoSmithKline Notes to the financial statements 25 Net debt continued Secured loans Loans amounting to £13 million (2001 – £13 million) are secured by charges on fixed and current assets. 2002 2001 Finance lease obligations £m £m Rental payments due within one year 1 2 Rental payments due between one and two years 2 2 Rental payments due between two and three years 1 1 Rental payments due between three and four years 1 1 Rental payments due between four and five years 1 1 Rental payments due after five years 7 7 Total finance lease obligations 13 14 Financial instruments Further information is given in Note 32. 26 Commitments Capital commitments 2002 £m 2001 £m Contracted for but not provided in the financial statements Intangible fixed assets 1,410 1,103 Tangible fixed assets 382 298 1,792 1,401 A number of commitments were made in 2002 under licensing and other agreements, principally with elbion AG, Adolor Corporation, Theravance, Inc. and Unigene Laboratories, Inc. Payments become due if future ‘milestones’ are achieved. As some of these agreements relate to compounds in the early stages of development, milestone payments will continue for a number of years if the compounds move successfully through the development process. Generally the closer the product is to marketing approval the greater the possibility of success. The Group also has other commitments of £162 million relating to other payments to be made under licences and other alliances, principally to Exelixis Inc. 2002 2001 Commitments under operating leases to pay rentals for the next year £m £m Operating leases on land and buildings which expire: In one year or less 10 5 Between one and five years 47 18 After five years 56 51 113 74 Operating leases on plant, equipment and vehicles which expire: In one year or less 7 4 Between one and five years 47 27 After five years 1 – Commitments under operating leases to pay rentals in future years 55 31 2003 168 105 2004 97 89 2005 80 79 2006 59 69 2007 49 59 2008 and thereafter 249 241 702 642
Notes to the financial statements GlaxoSmithKline 101 27 Share capital and share premium account Redeemable preference shares of £1 each Ordinary Shares of 25p each Share premium account Number £m Number £m £m Share capital authorised At 31st December 2001 – – 10,000,000,000 2,500 At 31st December 2002 – – 10,000,000,000 2,500 Share capital issued and fully paid At 1st January 2001 50,000 – 6,225,662,174 1,556 30 Share capital redeemed at par (50,000) – – – – Share capital issued under share option schemes – – 17,878,815 4 140 Share capital purchased and cancelled – – (70,575,000) (17) – At 31st December 2001 – – 6,172,965,989 1,543 170 Share capital issued under share option schemes – – 7,049,394 2 54 Share capital purchased and cancelled – – (155,749,038) (39) – At 31st December 2002 – – 6,024,266,345 1,506 224 Number (000) Number of shares issuable under outstanding options (Note 34) At 31st December 2001 155,078 At 31st December 2002 217,953 Number of unissued shares not under option At 31st December 2001 3,671,956 At 31st December 2002 3,757,781 The redeemable preference shares were redeemed by the company on 31st August 2001.The nominal amount of these redeemable preference shares was converted into 200,000 ordinary shares of 25 pence each resulting in authorised share capital at 31st December 2001 of 10 billion ordinary shares of 25 pence each. In October 2002, GlaxoSmithKline commenced a new £4 billion share buy-back programme. This follows the completion of the £4 billion buy-back programme announced in 2001. A total of £2,220 million was spent in 2002 of which £219 million relates to the new buy-back programme. The exact amount and timing of future purchases will be determined by the Group and is dependent on market conditions and other factors. In the period 1st January 2003 to 3rd March 2003 a further 9,350,000 shares had been purchased and cancelled at a cost of £105 million. For details of substantial shareholdings refer to ‘Substantial shareholdings’ on page 155. 28 Non-equity minority interests SmithKline Beecham Holdings Corporation (SBH Corp), a subsidiary incorporated in Delaware, USA, has in issue $500 million of Flexible Auction Market Preferred Stock (Flex AMPS), comprising 5,000 shares of $100,000 each, issued in six series. The dividend on half of these shares was fixed on issuance in 1996 for a seven year period. The dividend on the other half was fixed for a five year period which ended during 2001 and now varies, predominately with prevailing interest rates, and is set every seven weeks at an auction at which the shares are also traded. SBH Corp also has in issue $400 million of Auction Rate Preference Stock (ARPS), comprising 4,000 shares of $100,000 each, issued in five series, the dividend on which also varies under conditions similar to the Flex AMPS described above. Together, the ARPS and the Flex AMPS constitute the preference shares, which represent the non-equity minority interest. SmithKline Beecham plc has, in certain circumstances, guaranteed payment of dividends declared on the preference shares. SmithKline Beecham plc has also agreed with SBH Corp that in certain circumstances it will provide support to SBH Corp in relation to the principal. However, any guarantee or support is limited so that in no circumstances could the holder of preference shares be in a more favourable position than had they been a holder of a preference share in SmithKline Beecham plc. The preference shares represent a long-term non-equity minority interest in the Group balance sheet in accordance with FRS 4 ‘Capital Instruments’ and UITF 33 ‘Obligations in capital instruments’.
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Do more, feel better, live longer T
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The Annual Report was approved by t
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Joint statement by the Chairman and
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04 GlaxoSmithKline Joint statement
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Products - Pharmaceuticals Descript
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Additionally, GlaxoSmithKline marke
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Competition - Consumer Healthcare T
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Operating activities Marketing and
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Description of business GlaxoSmithK
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Description of business GlaxoSmithK
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Product approvals Country/Region Pr
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As part of GlaxoSmithKline’s majo
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Operating resources Intellectual pr
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Compensation philosophy and program
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Access to healthcare in the develop
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GlaxoSmithKline gave unrestricted g
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Corporate governance This section d
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Corporate Executive Team (CET) JP G
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The Annual General Meeting takes pl
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Research and development Safety of
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Remuneration report GlaxoSmithKline
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The majority of the competitor pane
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Performance graph 100 90 80 70 60 N
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Non-Executive Directors Non-Executi
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Non-Executive Directors’ share ar
Page 51 and 52: Incentive plans Remuneration report
Page 53 and 54: Operating and financial review and
Page 55 and 56: 2002 Year World economy The world
Page 57 and 58: Pharmaceutical sales by therapeutic
Page 59 and 60: Consumer Healthcare sales 2002 2001
Page 61 and 62: Earnings 2001 2002 (restated) CER%
Page 63 and 64: Contractual obligations and commitm
Page 65 and 66: Funding, maturity and counterparty
Page 67 and 68: Stricter regulatory controls also h
Page 69 and 70: Operating and financial review and
Page 71 and 72: Latin America reported eight per ce
Page 73 and 74: Selected financial data UK/US GAAP
Page 75 and 76: Financial statements GlaxoSmithKlin
Page 77 and 78: Independent Auditors’ report to t
Page 79 and 80: Consolidated statement of profit an
Page 81 and 82: Consolidated statement of cash flow
Page 83 and 84: Company balance sheet at 31st Decem
Page 85 and 86: 2 Accounting policies Consolidation
Page 87 and 88: 2 Accounting policies continued Sto
Page 89 and 90: 6 Segment information continued Not
Page 91 and 92: 7 Merger items, restructuring costs
Page 93 and 94: Notes to the financial statements G
Page 95 and 96: 13 Earnings per share Notes to the
Page 99 and 100: 19 Equity investments Notes to the
Page 101: Notes to the financial statements G
Page 105 and 106: 30 Legal proceedings The Group is i
Page 107 and 108: 30 Legal proceedings continued In F
Page 109 and 110: 30 Legal proceedings continued In 2
Page 111 and 112: 31 Acquisitions and disposals conti
Page 113 and 114: 32 Financial instruments and relate
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Page 117 and 118: 33 Employee costs continued Notes t
Page 119 and 120: 33 Employee costs continued Notes t
Page 121 and 122: 34 Employee share schemes continued
Page 123 and 124: 34 Employee share schemes continued
Page 125 and 126: 37 Reconciliation to US accounting
Page 141 and 142: 38 Principal Group companies Notes
Page 143 and 144: 38 Principal Group companies contin
Page 145 and 146: Financial record GlaxoSmithKline 14
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Investor information GlaxoSmithKlin
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Shareholder information Ordinary sh
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Share capital GlaxoSmithKline 155 A
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Cross reference to Form 20-F GlaxoS
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Index A Access to healthcare 27 Acc
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Contact details INTERNET Informatio
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GSK Annual Report 2002

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