Notes 1-5

3. Operating costs


2008
£m
2007
£m
2006
£m
Total staff costs (note 5) 4,351.8 3,607.9 3,474.4
Establishment costs 521.3 427.2 419.1
Other operating costs (net) 1,260.3 1,010.6 975.9
Total operating costs 6,133.4 5,045.7 4,869.4
Operating costs include:
Goodwill impairment 84.1 44.1 35.5
Goodwill write-down relating to utilisation
of pre-acquisition tax losses (note 12)1
1.5 1.7 8.8
Investment write-downs 30.5
Cost of changes to corporate structure 4.6
Amortisation and impairment of acquired intangible
assets (note 12)
78.4 40.3 43.3
Amortisation of other intangible assets (note 12) 23.4 18.1 13.5
Depreciation of property, plant and equipment 145.4 123.7 127.3
Losses/(gains) on sale of property, plant and equipment 1.9 1.0 (3.7)
Gains on disposal of investments (3.4) (3.4) (7.3)
Net foreign exchange (gains)/losses (18.3) 1.1 5.0
Operating lease rentals:
Land and buildings 325.2 261.1 251.7
Plant and machinery 26.5 25.8 30.4
  351.7 286.9 282.1

Notes

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 2008, operating profit includes credits totalling £23.7 million (2007: £16.8 million, 2006: £10.6 million) relating to the release of excess provisions and other balances established in respect of acquisitions completed prior to 2007. 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:

 
2008
£m
2007
£m
2006
£m
Fees payable to the Company’s auditors for the audit of
the Company’s annual accounts
1.7 1.7 1.7
The audit of the Company’s subsidiaries pursuant to legislation 13.3 11.4 10.8
  15.0 13.1 12.5
Other services pursuant to legislation 3.8 3.5 4.0
Fees payable to the auditors pursuant to legislation 18.8 16.6 16.5
Tax advisory services 2.2 2.7 2.8
Tax compliance services 0.9 0.9 1.1
  3.1 3.6 3.9
Corporate finance services 1.5 1.0
Other services 4.4 3.0 3.3
Total non-audit fees 9.0 7.6 7.2
Total fees 27.8 24.2 23.7
Minimum committed annual rentals

Amounts payable in 2009 under the foregoing leases will be as follows:

  Plant and machinery Land and buildings

 
2009
£m
2008
£m
2007
£m
2009
£m
2008
£m
2007
£m
In respect of operating
leases which expire:
– within one year 6.6 6.4 6.9 63.4 27.9 30.8
– within two to five years 14.2 12.9 13.5 168.3 115.5 95.5
– after five years 0.3 0.3 1.8 107.5 75.0 75.8
  21.1 19.6 22.2 339.2 218.4 202.1

Future minimum annual amounts payable under all lease commitments in existence at 31 December 2008 are as follows:


 
 
 
Minimum
rental
payments
£m
Less
sub-let
rentals
£m

Net
payment
£m
Year ending 31 December
2009
360.3 (25.3) 335.0
2010 326.4 (22.4) 304.0
2011 273.8 (20.8) 253.0
2012 241.9 (19.5) 222.4
2013 199.2 (11.2) 188.0
Later years 1,151.6 (20.7) 1,130.9
  2,553.2 (119.9) 2,433.3

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