GSK Annual Report 2002

88 GlaxoSmithKline Notes to the financial statements
6 Segment information continued 2002 2001
Land and
Plant,
equipment Computer Assets in
Tangible fixed assets by location of subsidiary undertaking
buildings
£m
and vehicles
£m
software
£m
construction
£m
Total
£m
Total
£m
USA 680 379 31 322 1,412 1,536
Europe 1,700 1,833 118 553 4,204 4,138
International 524 370 11 128 1,033 1,171
Total 2,904 2,582 160 1,003 6,649 6,845
UK segment
Information is given separately in respect of the UK, which, although included in the Group’s Europe market region, is considered the
Group’s home segment for the purposes of segmental reporting.
2001
2002 (restated) 2000
£m £m £m
Turnover by location of customer 1,366 1,328 1,151
Gross turnover 4,945 5,388 3,306
Inter-segment turnover (3,230) (3,753) (1,798)
Turnover by location of subsidiary 1,715 1,635 1,508
Operating profit 1,276 1,772 1,665
Total assets 8,846 7,274
Net operating assets 4,910 4,514
7 Merger items, restructuring costs and divested businesses
Manufacturing and other restructuring costs were incurred by GlaxoSmithKline during 2002 and 2001 in implementation of previously
announced plans for restructuring of manufacturing and other activities. These costs were also incurred by Glaxo Wellcome and SmithKline
Beecham in 2000.
Merger integration costs relate to the integration of Glaxo Wellcome and SmithKline Beecham into a unified GlaxoSmithKline business.
These costs include consultancy fees in respect of integration planning, severance costs, asset write-offs, costs related to the early vesting
or lapse of performance conditions on share options and share incentive awards and costs of the programme to encourage staff to convert
Glaxo Wellcome and SmithKline Beecham share options into GlaxoSmithKline share options. Integration costs were incurred in 2002 and
2001 relating to the integration of the Block Drug businesses. These costs include professional fees, severance costs and asset write-offs.
Product divestment income arising in 2002 related to the finalisation of the disposals of Famvir, Kytril and other products required in 2000
in order to obtain regulatory approval for the merger. Merger transaction costs were incurred in 2000 in order to effect the merger. These
costs comprise the fees and expenses incurred in preparing and implementing the scheme of arrangement for the merger.
The disposal of businesses in 2002 related to the finalisation of the disposals of Clinical Laboratories and Healthcare Services in 1999. The
disposal of businesses in 2001 primarily arose on the sale of Affymax. It included a £299 million write off of goodwill which was previously
eliminated against Group reserves. The disposal of businesses in 2000 relates to the disposal of Healthcare Services in 1999. Restructuring
costs were incurred in Healthcare Services before its disposal.
The share of associate in 2000 related to restructuring costs incurred by Quest Diagnostics.
Restruc- Disposal of
2002
Merger
£m
turing
£m
Block Drug
£m
subsidiaries
£m
Total
£m
Manufacturing and other restructuring – (121) – – (121)
Merger integration costs (851) – – – (851)
Block Drug integration costs – – (60) – (60)
Effect on operating profit (851) (121) (60) – (1,032)
Product divestments 11 – – – 11
Profit on disposal of businesses – – – 10 10
Effect on profit before tax (840) (121) (60) 10 (1,011)
Effect on taxation – operating items 266
Effect on taxation – non-operating items 33
Effect on taxation 299
Effect on earnings (712)