GlaxoSmithKline PLC, adjustment to profit attributable to shareholders

US$ in millions, translated from GBP £

12 months ended:	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Profit attributable to shareholders (as reported)	4,655)	9,009)	7,424)	8,174)	2,515)
Add: Fair value movements on available-for-sale investments	49)	608)	125)	(31)	145)
Less: Reclassification of fair value movements on available-for-sale investments	(262)	(63)	(31)	(45)	2)
Profit attributable to shareholders (adjusted)	4,442)	9,554)	7,518)	8,098)	2,661)

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GlaxoSmithKline PLC, adjusted profitability ratios

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Net Profit Margin
Reported net profit margin	11.98%	20.51%	17.27%	19.21%	5.76%
Adjusted net profit margin	11.43%	21.75%	17.49%	19.03%	6.09%
Return on Equity (ROE)
Reported ROE	64.65%	77.69%	78.57%	65.50%	18.39%
Adjusted ROE	61.69%	82.39%	79.57%	64.89%	19.46%
Return on Assets (ROA)
Reported ROA	6.78%	12.92%	11.01%	12.81%	3.87%
Adjusted ROA	6.47%	13.70%	11.15%	12.69%	4.09%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	GlaxoSmithKline PLC adjusted ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	GlaxoSmithKline PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders	4,655)	9,009)	7,424)	8,174)	2,515)
Turnover	38,855)	43,926)	42,984)	42,553)	43,700)
Profitability Ratio
Net profit margin¹	11.98%	20.51%	17.27%	19.21%	5.76%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders	4,442)	9,554)	7,518)	8,098)	2,661)
Turnover	38,855)	43,926)	42,984)	42,553)	43,700)
Profitability Ratio
Adjusted net profit margin²	11.43%	21.75%	17.49%	19.03%	6.09%

2014 Calculations

¹ Net profit margin = 100 × Profit attributable to shareholders ÷ Turnover
= 100 × 4,655 ÷ 38,855 = 11.98%

² Adjusted net profit margin = 100 × Adjusted profit attributable to shareholders ÷ Turnover
= 100 × 4,442 ÷ 38,855 = 11.43%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders	4,655)	9,009)	7,424)	8,174)	2,515)
Shareholders’ equity	7,200)	11,596)	9,449)	12,480)	13,679)
Profitability Ratio
ROE¹	64.65%	77.69%	78.57%	65.50%	18.39%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders	4,442)	9,554)	7,518)	8,098)	2,661)
Shareholders’ equity	7,200)	11,596)	9,449)	12,480)	13,679)
Profitability Ratio
Adjusted ROE²	61.69%	82.39%	79.57%	64.89%	19.46%

2014 Calculations

¹ ROE = 100 × Profit attributable to shareholders ÷ Shareholders’ equity
= 100 × 4,655 ÷ 7,200 = 64.65%

² Adjusted ROE = 100 × Adjusted profit attributable to shareholders ÷ Shareholders’ equity
= 100 × 4,442 ÷ 7,200 = 61.69%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	GlaxoSmithKline PLC adjusted ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders	4,655)	9,009)	7,424)	8,174)	2,515)
Total assets	68,656)	69,748)	67,450)	63,828)	64,999)
Profitability Ratio
ROA¹	6.78%	12.92%	11.01%	12.81%	3.87%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders	4,442)	9,554)	7,518)	8,098)	2,661)
Total assets	68,656)	69,748)	67,450)	63,828)	64,999)
Profitability Ratio
Adjusted ROA²	6.47%	13.70%	11.15%	12.69%	4.09%

2014 Calculations

¹ ROA = 100 × Profit attributable to shareholders ÷ Total assets
= 100 × 4,655 ÷ 68,656 = 6.78%

² Adjusted ROA = 100 × Adjusted profit attributable to shareholders ÷ Total assets
= 100 × 4,442 ÷ 68,656 = 6.47%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	GlaxoSmithKline PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

GlaxoSmithKline PLC (NYSE:GSK)

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