REUTERS GROUP PLC ANNUAL REPORT AND ACCOUNTS 1999

2. Operating costs1999 % 1998 % 1997Costs by type £M CHANGE £M CHANGE £MWages, salaries, commission and allowances 869 8% 805 9% 729Social security costs 69 (5%) 73 15% 62Other pension costs (see note 23) 49 (2%) 50 10% 44Staff costs 987 6% 928 11% 835Services 641 10% 586 – 585Depreciation 310 (6%) 331 6% 312Data 227 (6%) 242 17% 207Communications 205 (1%) 207 3% 201Space 145 12% 129 (9%) 142Cost of sales and other 39 (23%) 52 (18%) 64Goodwill amortisation 47 2% 46 (9%) 51Reimbursement of costs (19) – – – –Currency hedging activities – net gain (9) (80%) (45) (20%) (56)Foreign currency translation – net loss 3 (44%) 6 – –2,576 4% 2,482 6% 2,341Services costs include equipment hire and bought-in services, including consultancy and contractors, advertising and publicity, professional fees and staff-relatedexpenses. Reimbursement of costs comprises amounts received from Factiva in respect of costs incurred by Reuters on behalf of the joint venture.1999 % 1998 % 1997Costs by function £M CHANGE £M CHANGE £MProduction and communications costs 1,556 (1%) 1,571 6% 1,486Selling and marketing 513 7% 479 7% 448Support services and administration 466 10% 425 3% 412Goodwill amortisation 47 2% 46 (9%) 51Net currency gain (6) (85%) (39) (30%) (56)2,576 4% 2,482 6% 2,341The presentation of costs by function has been revised to reflect more closely the activities under which costs are managed in the new organisation structure.1999 % 1998 % 1997Costs include: £M CHANGE £M CHANGE £MDevelopment expenditure 197 (2%) 200 (15%) 235Operating lease expenditure:Hire of equipment 9 (18%) 11 (27%) 14Other, principally property 79 8% 73 1% 72Advertising costs 29 19% 24 38% 17Reversal of third party data fee accrual (25) – – – –Fees payable to PricewaterhouseCoopers (formerly Price Waterhouse)were as follows:Audit fees:United Kingdom 1.0 11% 0.9 – 0.9Overseas 0.9 – 0.9 (11%) 1.01.9 6% 1.8 (5%) 1.9Non-audit services:United Kingdom 4.7 24% 3.8 – 0.9Overseas 5.9 (3%) 6.1 15% 5.310.6 7% 9.9 60% 6.212.5 7% 11.7 44% 8.1Reuters Group PLC Annual Report 1999 47