Notes contentsNotes to consolidated financial statements

2. Segment information

Following the adoption of IFRS 8 ‘Operating Segments’ and changes in the organisational structure of the Education business, the Group has revised its reporting segments. The Group is now organised into six segments:

North American Education Educational publishing and testing for the school and higher education market within the USA and Canada;

International Education Educational publishing and testing for the school and higher education market outside of North America;

Professional Business and technology publishing and testing and certification for professional bodies;

FT Publishing Publisher of the Financial Times, business magazines and specialist information;

Interactive Data Provider of financial and business information to financial institutions and retail investors;

Penguin Publisher with brand imprints such as Penguin, Putnam, Berkley, Viking, Dorling Kindersley.

For more detail on the services and products included in each business segment refer to the business review.

All figures in £ millions Notes               2008
North
American
Education
International
Education
Professional FT
Publishing
Interactive
Data
Penguin Corporate Group
Sales (external)   2,002 866 244 390 406 903 4,811
Sales (inter-segment)   4 22 26
Adjusted operating profit   303 135 36 74 121 93 762
Amortisation of acquired intangibles   (45) (22) (1) (7) (9) (2) (86)
Operating profit   258 113 35 67 112 91 676
Finance costs 6               (136)
Finance income 6               45
Profit before tax                 585
Income tax 7               (172)
Profit for the year from continuing operations                 413
                   
Segment assets   4,952 1,358 423 482 524 1,211 923 9,873
Joint ventures 12 8 2 3 13
Associates 12 4 6 10
Assets — continuing operations   4,952 1,370 423 490 524 1,214 923 9,896
Assets — discontinued operations  
Total assets   4,952 1,370 423 490 524 1,214 923 9,896
 
Other segment items                  
Share of results of joint ventures and associates 12 5 19 1 25
Capital expenditure 10, 11, 20 224 82 22 17 25 51 421
Depreciation 10 25 12 8 13 13 9 80
Amortisation 11, 20 219 69 12 12 12 36 360


All figures in £ millions Notes               2007
North
American
Education
International
Education
Professional FT
Publishing
Interactive
Data
Penguin Corporate Group
Continuing operations                  
Sales (external)   1,667 735 226 344 344 846 4,162
Sales (inter-segment)   1 19 20
Adjusted operating profit   273 92 27 56 97 74 619
Amortisation of
acquired intangibles
  (20) (10) (1) (6) (7) (1) (45)
Operating profit   253 82 26 50 90 73 574
Finance costs 6               (150)
Finance income 6               44
Profit before tax                 468
Income tax 7               (131)
Profit for the year
from continuing operations
                337
Segment assets   3,536 1,013 291 397 330 937 651 7,155
Joint ventures 12 5 4 2 11
Associates 12 1 3 5 9
Assets — continuing operations   3,537 1,021 291 406 330 939 651 7,175
Assets — discontinued operations   117 117
Total assets   3,537 1,021 408 406 330 939 651 7,292
Other segment items                  
Share of results of
joint ventures and associates
12 6 1 16 23
Capital expenditure 10, 11, 20 136 109 20 28 19 44 356
Depreciation 10 26 7 9 9 10 7 68
Amortisation 11, 20 159 45 11 9 8 30 262

In 2008, sales from the provision of goods were £3,411m (2007: £3,053m) and sales from the provision of services were £1,400m (2007: £1,109m). Sales from the Group's educational publishing, consumer publishing and newspaper business are classified as being from the provision of goods and sales from its assessment and testing, market pricing, corporate training and management service businesses are classified as being from the provision of services.

Corporate costs are allocated to business segments on an appropriate basis depending on the nature of the cost and therefore the segment result is equal to the Group operating profit. Inter-segment pricing is determined on an arm's-length basis. Segment assets consist of property, plant and equipment, intangible assets, inventories, receivables, retirement benefit assets and deferred taxation and exclude cash and cash equivalents and derivative assets. Corporate assets comprise cash and cash equivalents, marketable securities and derivative financial instruments. Capital expenditure comprises additions to property, plant and equipment and intangible assets, including pre-publication but excluding goodwill (see notes 10, 11 and 20).

Property, plant and equipment and intangible assets acquired through business combination were £253m (2007: £226m) (see note 30). Capital expenditure, depreciation and amortisation include amounts relating to discontinued operations. Discontinued operations relate to the Data Management business in 2008 and to the Data Management business, Government Solutions, Datamark and Les Echos in 2007 (see note 3).

The Group operates in the following main geographic areas:

All figures in £ millions Sales   Non-current assets
2008 2007 2008 2007
Continuing operations          
UK 754 721   701 724
Other European countries 463 381   224 140
USA 2,861 2,448   4,624 3,146
Canada 167 143   209 183
Asia Pacific 415 351   179 114
Other countries 151 118   14 11
Total continuing 4,811 4,162   5,951 4,318
Discontinued operations          
UK 1  
Other European countries 82  
USA 8 78   117
Canada  
Other countries 6  
Total discontinued 8 167   117
Total 4,819 4,329   5,951 4,435

Sales are allocated based on the country in which the customer is located. This does not differ materially from the location where the order is received. Non-current assets are based on the subsidiaries country of domicile. This is not materially different to the location of the assets. Non-current assets comprise property, plant and equipment, intangible assets, investments in joint ventures and associates, other receivables and non-current assets classified as held for sale.