Operating expenses (Tables)

12 Months Ended

Dec. 31, 2021

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Summary of Operating Expenses by Function

All figures in £ millions	2021			2020			2019
By function:
Cost of goods sold		1,747			1,767			1,858
Operating expenses
Distribution costs		62			59			73
Selling, marketing and product development costs		521			572			631
Administrative and other expenses		802			816			999
Restructuring costs		214			—			157
Other income		(37	)		(45	)		(54	)
Total net operating expenses		1,562			1,402			1,806
Other net gains and losses		(63	)		(178	)		(16	)
Total		3,246			2,991			3,648

Summary of Analysis of Restructuring Costs

All figures in £ millions	2021		2020		2019
By nature:
Product costs		19		—		16
Employee costs		32		—		90
Impairment of non-current assets		145		—		14
Property and facilities		11		—		12
Technology and communications		3		—		2
Professional and outsourced services		4		—		17
General and administrative costs		—		—		6
Total restructuring – operating expenses		214		—		157
Share of associate restructuring		—		—		2
Total		214		—		159

Summary of Operating Expenses by Nature

All figures in £ millions	Notes		2021			2020			2019
By nature:
Royalties expensed				185			191			242
Other product costs				353			349			466
Employee benefit expense		5		1,365			1,337			1,452
Contract labour				69			67			139
Employee-related expense				21			30			94
Promotional costs				239			233			254
Depreciation and impairment of property, plant and equipment		10		241			125			123
Amortisation and impairment of intangible assets – product development		20		279			280			271
Amortisation and impairment of intangible assets – software		11		117			112			115
Amortisation and impairment of intangible assets – other		11		50			80			151
Property and facilities				124			85			96
Technology and communications				215			216			196
Professional and outsourced services				477			498			480
Other general and administrative costs				58			71			104
Costs capitalised				(447	)		(460	)		(465	)
Other net gains and losses				(63	)		(178	)		(16	)
Other income				(37	)		(45	)		(54	)
Total				3,246			2,991			3,648

Summary of Services From the Group's Auditors

All figures in £ millions	2021		2020		2019
The audit of parent company and consolidated financial statements		5		5		5
The audit of the company’s subsidiaries		2		2		2
Total audit fees		7		7		7
Audit-related and other assurance services		—		—		—
Other non-audit services		—		—		—
Total other services		—		—		—
Total non-audit services		—		—		—
Total		7		7		7

Summary of Reconciliation Between Audit and Non-Audit Service Fees

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

All figures in £ millions	2021		2020		2019
Group audit fees including fees for attestation under section 404 of the Sarbanes-Oxley Act		7		7		7
Non-audit fees		—		—		—
Total		7		7		7