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Notes 1-5

For the year ended 31 December 2007

3. Operating costs

  2007
£m
2006
£m
2005
£m
Total staff costs (note 5) 3,607.9 3,474.4 3,186.3
Establishment costs 427.2 419.1 387.6
Other operating costs (net) 1,010.6 975.9 906.0
Total operating costs 5,045.7 4,869.4 4,479.9
Operating costs include:
Goodwill impairment 44.1 35.5 46.0
Goodwill write-down relating to utilisation
of pre-acquisition tax losses (note 12)1
1.7 8.8 1.1
Amortisation and impairment of acquired intangible
assets (note 12)
40.3 43.3 25.3
Amortisation of other intangible assets (note 12) 18.1 13.5 10.7
Depreciation of property, plant and equipment 123.7 127.3 110.0
Losses/(Gains) on sale of property, plant and equipment 1.0 (3.7) 1.1
Gains on disposal of investments (3.4) (7.3) (4.3)
Net foreign exchange losses 1.1 5.0 0.8
Operating lease rentals:
Land and buildings 261.1 251.7 237.8
Plant and machinery 25.8 30.4 34.8
  286.9 282.1 272.6

Note

1 The goodwill write-down in relation to the utilisation of pre-acquisition tax losses is due to the better than expected performance of certain acquisitions in the year. This enabled the utilisation of pre-acquisition tax attributes that previously could not be recognised at the time of acquisition due to insufficient evidence that they were recoverable.

In 2007, operating profit includes credits totalling £16.8 million (2006: £10.6 million, 2005: £10.1 million) relating to the release of excess provisions and other balances established in respect of acquisitions completed prior to 2006. Further details of the Group's approach to acquisition reserves, as required by IFRS 3 'Business combinations', are given in note 28.

All of the operating costs of the Group are related to administrative expenses.

Auditors' remuneration:

  2007
£m
2006
£m
2005
£m
Fees payable to the Company's auditors for the audit of
the Company's annual accounts
1.7 1.7 1.9
The audit of the Company's subsidiaries pursuant to legislation 11.4 10.8 10.0
  13.1 12.5 11.9
Other services pursuant to legislation 3.5 4.0 3.0
Fees payable to the auditors pursuant to legislation 16.6 16.5 14.9
Tax advisory services 2.7 2.8 2.6
Tax compliance services 0.9 1.1 1.0
  3.6 3.9 3.6
Corporate finance services 1.0 0.2
Other services 3.0 3.3 2.8
Total non-audit fees 7.6 7.2 6.6
Total fees 24.2 23.7 21.5

Minimum committed annual rentals

Amounts payable in 2008 under the foregoing leases will be as follows:

  Plant and machinery   Land and buildings
  2008
£m
2007
£m
2006
£m
  2008
£m
2007
£m
2006
£m
In respect of operating
leases which expire:
– within one year 6.4 6.9 7.0   27.9 30.8 20.6
– within two to five years 12.9 13.5 17.9   115.5 95.5 94.5
– after five years 0.3 1.8 1.8   75.0 75.8 90.0
  19.6 22.2 26.7   218.4 202.1 205.1

Future minimum annual amounts payable under all lease commitments in existence at 31 December 2007 are as follows:

  Minimum
rental
payments
£m
Less
sub-let
rentals
£m
Net
payment
£m
Year ending 31 December
2008 238.0 (20.8) 217.2
2009 192.0 (16.9) 175.1
2010 169.3 (14.7) 154.6
2011 136.9 (13.1) 123.8
2012 118.1 (11.9) 106.2
Later years 591.4 (9.1) 582.3
  1,445.7 (86.5) 1,359.2