Principal subsidiary undertakings

For the years ended December 31
Income statement/Profit and loss account	Notes	2007 £m	2006 £m	2005 £m	2004 £m	2003¹ £m
Revenue/Group turnover		7,435	7,156	6,603	5,947	5,645
Profit before net research and development and share of joint venture profit		827	1,016	1,113	686	499
Research and development (net)	1	(381)	(370)	(282)	(288)	(281)
Share of profit of joint ventures	2	66	47	46	19	52
Profit before financing/profit on ordinary activities before interest		512	693	877	417	270
Net financing/interest payable	3	221	698	(400)	(53)	(90)
Profit before taxation		733	1,391	477	364	180
Taxation	4	(133)	(397)	(130)	(100)	(64)
Profit for the year		600	994	347	264	116

Attributable to:
Equity holders of the parent		606	998	350	263	116
Minority interests		(6)	(4)	(3)	1	—
		600	994	347	264	116

Notes
1 Research and development (gross)		(824)	(747)	(663)	(601)	(619)
2 Under Adopted IFRS, share of profit of joint ventures is net of share of interest and taxation charges of		(28)	(35)	(34)	(31)	—
3 Under UK GAAP, interest payable includes the joint ventures share of		—	—	—	—	(24)
4 Under UK GAAP, taxation includes the joint ventures share of		—	—	—	—	(10)

Earnings per ordinary share:
Underlying – Adopted IFRS		34.06p	29.81p	24.48p	15.62p	—
Basic – Adopted IFRS		33.67p	57.32p	20.11p	15.56p	—
Underlying – UK GAAP		—	—	—	—	12.20p
Basic – UK GAAP		—	—	—	—	7.04p

Payments to shareholders per ordinary share		13.00p	9.59p	8.72p	8.18p	8.18p

Balance sheet	2007 £m	2006² £m	2005² £m	2004² £m	2003^1,2 £m

Assets	11,459	10,798	9,627	8,419	7,689
Liabilities	(7,910)	(8,073)	(8,122)	(6,973)	(5,546)
	3,549	2,725	1,505	1,446	2,143

Called-up share capital	364	356	352	346	333
Reserves	3,173	2,362	1,147	1,096	1,807
Equity attributable to equity holders of the parent	3,537	2,718	1,499	1,442	2,140
Minority interests	12	7	6	4	3
	3,549	2,725	1,505	1,446	2,143

Cash flow	2007 £m	2006 £m	2005 £m	2004 £m	2003¹ £m


Cash inflow from operating activities	705	1,072	1,060	610	673
Cash outflow from investing activities – Adopted IFRS	(572)	(469)	(289)	(237)	—
Capital expenditure and financial investment – UK GAAP	—	—	—	—	(198)
Acquisitions and disposals – UK GAAP	—	—	—	—	(16)
Cash (outflow)/inflow from financing activities – Adopted IFRS	(473)	(122)	(443)	189	—
Interest, dividends and taxation – UK GAAP	—	—	—	—	(176)
Management of liquid resources – UK GAAP	—	—	—	—	(90)
Financing – UK GAAP	—	—	—	—	(17)
(Decrease)/increase in cash and cash equivalents (Adopted IFRS)/Increase in cash (UK GAAP)	(340)	481	328	562	176
Amounts as previously reported under UK GAAP. Progress payments received against other inventory previously included within 'Inventory' have been reclassified to 'Trade and other payables'. Post-retirement scheme surpluses netted against post-retirement scheme deficits in 2006 have been separately disclosed.