Reuters Group PLC Annual Report and Form 20 ... - Thomson Reuters

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38 Reuters Group PLC Annual Report and Form 20-F 2002Notes on the consolidated profit and loss accountcontinued1. Segmental analysis continued2002 % 2001 % 2000Results £m change £m change £mTreasury Services 1,091 (4%) 1,138 8% 1,058Investment Banking 783 – 787 16% 677Asset Management 622 2% 611 4% 589Corporates & Media 222 4% 213 (3%) 219Segmental revenue less direct customer segment costs 2,718 (1%) 2,749 8% 2,543Channels (1,151) – (1,147) 8% (1,068)Business Technology Group (779) 1% (775) 13% (685)Chief Information Office (98) (7%) (105) (5%) (111)Editorial (216) (11%) (241) 4% (233)Business Support Services (49) (51%) (99) 169% (37)Corporate/other (32) (59%) (78) (20%) (96)Reuters 393 29% 304 (3%) 313Instinet (14) (108%) 178 13% 157Restructuring costs (208) 110% (99) – –Operating profit before amortisation and impairmentof goodwill and other intangibles 171 (56%) 383 (19%) 470Amortisation of goodwill and other intangiblesReuters (86) 28% (67) 38% (48)Instinet (21) 45% (14) 30% (11)Impairment of goodwillInstinet (208) – – – –Operating (loss)/profit (144) 302 (26%) 411Revenue is normally invoiced in the same geographical area in which the customer is located. Revenue earned, therefore, generally representsrevenue both by origin and by destination.The geographical analysis of performance reflects the revenues earned and operating costs incurred in each area excluding amortisation ofgoodwill and intangibles, goodwill impairment, restructuring costs and net currency gain/(loss).2002 % 2001 % 2000By geography £m change £m change £mRevenueEurope, Middle East and Africa 1,714 (7%) 1,838 9% 1,689The Americas 1,354 (10%) 1,502 12% 1,344Asia/Pacific 507 (7%) 545 (3%) 5593,575 (8%) 3,885 8% 3,592Operating costs where incurredEurope, Middle East and Africa (1,483) (12%) (1,677) 7% (1,574)The Americas (1,421) 1% (1,400) 16% (1,211)Asia/Pacific (300) (4%) (313) (8%) (339)(3,204) (5%) (3,390) 9% (3,124)ContributionEurope, Middle East and Africa 231 43% 161 40% 115The Americas (67) 102 (23%) 133Asia/Pacific 207 (11%) 232 5% 220371 (25%) 495 6% 468Other costsAmortisation of goodwill and other intangible assets (107) 31% (81) 36% (59)Goodwill impairment (208) – – – –Restructuring costs (208) 110% (99) – –Net currency gain/(loss) 8 (13) 2Operating profit (144) 302 (26%) 411United Kingdom and Ireland revenue was £485 million (2001: £521 million, 2000: £522 million). With the exception of Instinet, Reuters productsare delivered and sold primarily through a common geographical infrastructure and delivered over a number of communications networks.The impact of the Island acquisition in 2002 and the Bridge acquisition in 2001 are reflected principally in the Americas (see note 31).2002 % 2001 % 2000Revenue by type £m change £m change £mRecurring 2,699 (1%) 2,724 7% 2,537Usage 713 (24%) 946 10% 863Outright 163 (25%) 215 13% 1923,575 (8%) 3,885 8% 3,592Recurring revenue is derived from the sale of subscription services, including maintenance contracts. Usage revenue is principally derivedfrom Instinet, Dealing 2000-2, Dealing 3000 Spot Matching and BTC. Outright revenue comprises once-off sales including information andrisk management solutions.
Reuters Group PLC Annual Report and Form 20-F 2002 392. Operating costs2002 % 2001 % 2000Costs by type £m change £m change £mSalaries, commission and allowances 1,180 (9%) 1,299 20% 1,081Social security costs 79 (5%) 83 2% 81Other, pension costs (see note 23) 65 4% 63 12% 56Staff costs 1,324 (8%) 1,445 19% 1,218Services 811 (8%) 883 (1%) 895Depreciation 227 (8%) 246 (11%) 276Data 343 1% 340 15% 296Communications 420 25% 335 37% 245Space 312 29% 242 20% 202Cost of sales and other 31 (31%) 45 45% 31Amortisation of goodwill and other intangibles 107 31% 81 37% 59Goodwill impairment (see note 14) 208 – – – –Other operating income (56) 21% (47) 21% (39)Currency hedging activities – net (gain)/loss (10) 2 (5)Foreign currency translation – net loss 2 11 33,719 4% 3,583 13% 3,181The directors believe that the nature of the Group’s business is such that the format of the analysis of operating costs required by the CompaniesAct 1985 is not appropriate. The format has been adapted in a manner consistent with the Group’s activities. Services include equipment hire andbought-in services, including consultancy and contractors, advertising and publicity, professional fees and staff-related expenses. Other operatingincome comprises amounts received from joint ventures and others in respect of costs incurred by Reuters on their behalf.2002 % 2001 % 2000Costs by function £m change £m change £mProduction and communications 1,947 1% 1,933 6% 1,822Selling and marketing 574 (19%) 706 14% 621Support services and administration 683 (9%) 751 10% 681Amortisation of goodwill and other intangibles 107 31% 81 37% 59Restructuring costs 208 110% 99 – –Goodwill impairment 208 – – – –Net currency (gain)/loss (8) 13 (2)Costs include:3,719 4% 3,583 13% 3,181Development expenditure 200 (32%) 294 (9%) 323Operating lease expenditure:Hire of equipment 9 (37%) 13 30% 10Other, principally property 112 4% 108 30% 83Loss on disposal of tangible fixed assets 1 11 10% 10Advertising 32 (6%) 34 (33%) 50
Page 1 and 2: The 2002 Results.Be informed.Reuter
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Page 65 and 66: Accounting policiesReuters Group PL
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Page 73 and 74: Information for shareholdersReuters
Page 83 and 84: Eleven year consolidated financial
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