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Notes to the Consolidated Financial Statements

4. Operating expenses

All figures in millions 2007 2006
By function:
Cost of goods sold 1,910 1,841
Operating expenses
Distribution costs 264 288
Administrative and other expenses 1,538 1,462
Other income (101) (99)
Total operating expenses 1,701 1,651
Total 3,611 3,492
All figures in millions Notes 2007 2006
By nature:
Utilisation of inventory 18 732 702
Depreciation of property, plant and equipment 10 65 68
Amortisation of intangible assets – Pre-publication 17 192 210
Amortisation of intangible assets – Other 11 70 48
Employee benefit expense 5 1,288 1,225
Operating lease rentals 129 122
Other property costs 122 121
Royalties expensed 365 360
Advertising, promotion and marketing 195 190
Information technology costs 70 71
Other costs 484 474
Other income (101) (99)
Total 3,611 3,492

During the year the Group obtained the following services from the Group’s auditor:

All figures in millions 2007 2006
Fees payable to the Company’s auditor for the audit of parent company
and consolidated accounts
1 1
The audit of the Company’s subsidiaries pursuant to legislation 2 4
Other services pursuant to legislation 1 4
Tax services 2 1
Other services 1 1
Total 7 11

Reconciliation between audit and non-audit service fees is shown below:

All figures in millions 2007 2006
Group audit fees including fees for attestation under
section 404 of the Sarbanes-Oxley Act
4 9
Non-audit fees 3 2
Total audit fees 7 11

Other services pursuant to legislation represent fees payable for services in relation to other statutory filings or engagements that are required to be carried out by the appointed auditor. In particular, this includes fees for attestation under section 404 of the Sarbanes-Oxley Act.

Tax services include services related to tax planning and various other tax advisory services.

Other services include services related to the disposal of the Data Management business, due diligence on acquisitions and advisory services in relation to information technology and section 404.

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