Operating review Financial review


Operating review
Financial review
Overview
Financial statements
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Managing our financial risks



Financial review

  2002   2001  
OPERATING PROFIT FROM CONTINUING OPERATIONS 493m $794m 426m $686m
OPERATING PROFIT FROM DISCONTINUED OPERATIONS (RTL) - - 37m $59m
GOODWILL AMORTISATION (330)m $(531)m (375)m $(604)m
GOODWILL IMPAIRMENT (10)m $(16)m (61)m $(98)m
INTEGRATION COSTS (10)m $(16)m (74)m $(119)m
NON OPERATING ITEMS (37)m $(60)m (128)m $(206)m
AMOUNTS WRITTEN OFF INVESTMENTS - - (92)m $(148)m
NET INTEREST PAYABLE (94)m $(151)m (169)m $(272)m
EARLY REPAYMENT OF DEBT AND TERMINATION OF SWAP CONTRACTS (37)m $(60)m - -
LOSS BEFORE TAXATION (25)m $(40)m (436)m $(702)m
TAXATION (64)m $(103)m 33m $53m
LOSS AFTER TAXATION (89)m $(143)m (403)m $(649)m
MINORITY INTERESTS (22)m $(35)m (20)m $(32)m
LOSS FOR THE FINANCIAL YEAR (111)m $(178)m (423)m $(681)m
DIVIDENDS (187)m $(301)m (177)m $(285)m
RETAINED LOSS FOR THE YEAR (298)m $(479)m (600)m $(966)m


The sale of our 22% share in RTL was concluded at the end of January 2002 allowing us to pay down our debt to under 1.5bn and marking the beginning of a period of portfolio stability. This also results in the Pearson profit and loss account becoming more straightforward as our significant acquisition and disposal activity and our start-up internet investments are largely behind us. 2002 also marks the end of the integration charges on our major acquisitions. Moreover, the goodwill amortisation arising from those acquisitions will be more predictable.

Our operating profits from continuing operations in 2002 increased from 2001 by 18% to 493m. However, almost entirely as a result of our (non-cash) goodwill amortisation charge, we still show an overall loss for the financial year.


 
 
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We are the world?s biggest book publisher and we are beginning to make that scale count in our favour. We have combined our book businesses in Australia and Canada and we are moving to share back office operations such as warehousing and distribution in the UK and New Zealand.

   
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