Selected financial data

Selected financial data
Under IFRS 2008
£000		 2007
£000		 2006
£000		 2005
£000		 2004
£000
Revenues 298,934 259,160 263,254 232,439 152,897
Cost of revenues (32,878) (28,105) (30,877) (26,610) (12,240)
Gross profit 266,056 231,055 232,377 205,829 140,657
Total net operating expenses (206,113) (191,361) (183,129) (170,672) (112,328)
Profit from operations 59,943 39,694 49,248 35,157 28,329
Investment income, net 3,246 5,402 6,758 5,317 6,944
Profit before tax 63,189 45,096 56,006 40,474 35,273
Tax (19,597) (9,846) (7,850) (10,827) (9,398)
Profit for the year 43,592 35,250 48,156 29,647 25,875
Dividends paid 26,383 18,547 12,367 10,436 8,975
Capital expenditure 8,720 5,444 8,559 6,064 5,036
Research and development expenditure 87,588 83,977 84,884 80,273 54,674
Cash, short- and long-term investments 78,789 51,323 128,494 160,902 142,817
Shareholders’ funds 740,343 579,162 660,926 746,847 642,538
Employees at end of year (number) 1,740 1,728 1,659 1,324 1,171

The following table shows non-GAAP measures used in this annual report, including reconciliations from the IFRS GAAP measures. They exclude acquisition-related charges, share-based compensation charges and restructuring charges, and profit on disposal or impairments of available-for-sale investments.

The following table shows non-GAAP measures used in this annual report
2008
£000		 2007
£000		 2006
£000		 2005
£000		 2004
£000
Profit from operations (per GAAP income statement) 59,943 39,694 49,248 35,157 28,329
Operating margin 20.1% 15.3% 18.7% 15.1% 18.5%
Acquisition-related charge – amortisation of intangibles 19,601 19,195 19,337 17,939 511
Acquisition-related charge – other payments 382 1,735 1,057 – –
Share-based compensation and related payroll taxes 15,908 18,387 17,445 21,508 8,210
Restructuring charges 1,872 1,037 – – –
Impairment of available-for-sale security – 2,100 (5,270) – (392)
Normalised profit from operations 97,706 82,148 81,817 74,604 36,658
Normalised operating margin 32.7% 31.7% 31.1% 32.1% 24.0%
Investment income, net 3,246 5,402 6,758 5,317 6,944
Normalised profit before tax 100,952 87,550 88,575 79,921 43,602
Tax (per GAAP income statement) (19,597) (9,846) (7,850) (10,827) (9,398)
Tax impact of above charges (8,524) (12,498) (10,350) (9,439) (1,270)
Normalised profit after tax 72,831 65,206 70,375 59,655 32,934
Normalised EPS (pence) 5.66 4.79 5.02 4.19 3.14
IFRS Diluted EPS (pence) 3.39 2.59 3.43 2.08 2.47

Approximately 95% of the Group’s revenues are earned in US dollars. As such, dollar revenues are based on actual dollar invoicing where applicable, and using the rate of exchange on the date of the transaction for invoicing in currencies other than dollars.

Group’s revenues
2008
£000		 2007
£000		 2006
£000		 2005
£000		 2004
£000
Revenues (£’000) 298,934 259,160 263,254 232,439 152,897
ARM’s effective exchange rate 1.83 1.98 1.84 1.80 1.78
Revenues ($’000) 546,211 514,301 483,637 418,668 272,410
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