4. Cost of sales and Net operating expenses | |
| 2004 £m |
2003 £m |
|
|---|---|---|
| Cost of sales | 4,273 | 4,092 |
| Net operating expenses comprise: | ||
| Distribution costs | 1,377 | 1,153 |
| Administrative expenses (including goodwill £193m (2003 £162m)) | 1,279 | 1,417 |
| 2,656 | 2,570 |
Cost of sales includes £142m (2003 £908m) in respect of discontinued activities.
Net operating expenses include £127m (2003 £749m) in respect of discontinued activities of which distribution costs represent £60m (2003 £403m) and administrative expenses represent £67m (2003 £346m).
Administrative expenses include an exceptional charge of £5m (2003 £41m) comprising income of £2m in respect of employee share schemes in connection with the Initial Public Offering of Burberry (2003 £22m charge), restructuring costs in Argos Retail Group of £7m (2003 nil) and the impairment of goodwill of nil (2003 £19m) (Note 5).