Unilever 2006 Annual Report Download - page 90

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Unilever Annual Report and Accounts 2006 87
Financial Statements (continued)
Notes to the consolidated accounts Unilever Group
7Combined earnings per share
€€€
Combined earnings per share 2006 2005 2004
From continuing operations
Basic earnings per share 1.19 1.07 0.87
Diluted earnings per share 1.15 1.04 0.84
From discontinued operations
Basic earnings per share 0.46 0.22 0.07
Diluted earnings per share 0.45 0.21 0.07
From total operations
Basic earnings per share 1.65 1.29 0.94
Diluted earnings per share 1.60 1.25 0.91
Basis of calculation
The calculations of combined earnings per share are based on the net profit attributable to ordinary capital divided by the average number of
shareunits representing the combined ordinary capital of NV and PLC in issue during the year, after deducting shares held as treasury stock.
Earnings per share are calculated on the basis of the revised nominal share values which have been applied since 22 May 2006 and which
resulted in a one-to-one equivalence of ordinary shares of NV and PLC as regards their economic interest in the Group. For further information
please refer to note 22 on page 109.
The calculations of diluted earnings per share are based on: (i) conversion into PLC ordinary shares of the shares in a group company which are
convertible in the year 2038, as described in Corporate governance on page 42; (ii) conversion of the €0.05 NV preference shares, details of
which areset out below and in note 22 on page 109; (iii) the effect of share-based compensation plans, details of which are set out in note 29
on pages 117 to 121; and (iv) the forward equity contract described in note 29 on page 121.
On15 February 2005, Unilever converted its €0.05 NV preference shares into ordinary €0.51 NV shares. The conversion was made using shares
already held by Unilever for the purposes of satisfying the Group’sshare-based compensation plans. Unilever bought further ordinary shares in
the market during 2005 to the extent required to restorethe hedging position. Until the date of conversion, the €0.05 preference shares were
potentially dilutive for the purposes of the calculation of fully diluted earnings per share, as shown below.At midnight on 13 July 2005 the
€0.05 NV preference shares were cancelled.
Millions of shareunits
Calculation of average number of share units 2006 2005 2004
Average number of shares: NV 1714.7 1714.7 1714.7
PLC 1310.2 1310.2 1310.2
Less shares held by employee sharetrusts and companies (141.6) (111.9) (134.7)
Combined average number of share units for all bases except diluted earnings per share 2883.3 2913.0 2 890.2
Add shares issuable in 2038 70.9 70.9 70.9
Add shares for conversion –7.1 56.6
Add dilutive effect of share-based compensation plans and forward equity contract 18.3 16.0 14.9
Adjusted combined average number of share units for diluted earnings per share basis 2972.5 3007.0 3 032.6
€million €million € million
Calculation of earnings 2006 2005 2004
Net profit attributable to shareholders’ equity 4745 3766 2 755
Less preference dividends n/a n/a (28)
Net profitattributed to ordinary capital for basic earnings per share calculations 4745 3766 2727
Adjusted net profit attributed to ordinary capital for the diluted earnings per share calculation(a) 4745 3769 2 748
(a) In accordance with IAS 33, the net profit for diluted earnings per share has been adjusted for the preference dividend on shares for
conversion, which in 2006 amounted to €nil (2005: €3 million; 2004: €21 million).