AstraZeneca Annual Report and Form 20-F Information 2008

Notes to the Financial Statements (Group)

• 1 Operating profit
• 2 Finance income and expense
• 3 Taxation
• 4 Earnings per $0.25 Ordinary Share
• 5 Segment information

1 Operating profit

Operating profit includes the following items:

Other operating income and expense

	2008  $m	2007  $m	2006  $m
Royalties1	113	236	327
Net gain on disposal of property, plant and equipment	6	9	2
Net loss on disposal of intangible assets	(17)	(1)	(1)
Gains on divestments of non-core products	118	192	161
Other income	304	310	115
Other expense	–	(18)	(80)
Other operating income and expense	524	728	524

¹Royalty income is net of amortisation of intangible assets relating to royalty income streams and in 2008 the impairment of the HPV royalty intangible asset ($91m).

Restructuring and synergy costs

During 2008 the Group continued the restructuring and synergy programmes announced in 2007. In addition, the Group announced further programmes during the year. The tables below show the costs that have been charged in respect of these programmes to the income statement by cost category and type. Severance provisions are detailed in
Note 18.

	2008 $m	2007 $m	2006 $m
Cost of sales	405	415	–
Research and development	166	73	–
Selling, general and administrative expenses	310	478	–
Total charge	881	966	–

	2008 $m	2007 $m	2006 $m
Severance costs	499	678	–
Accelerated depreciation and impairment	219	203	–
Other	163	85	–
Total charge	881	966	–

The total charge in respect of the Global Supply Chain productivity initiative is anticipated to be around $1,250m.

In aggregate, research and development restructuring costs of around $300m are expected.

The total charge in respect of selling and marketing and business infrastructure is anticipated to be around $1,400m.

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