Aviva 2002 Annual Report Download - page 81

16 – Earnings per share
(a) Basic earnings per share
Restated
2002 2001
Net of tax, Net of tax,
minorities and minorities and
preference preference
Before tax dividends Per share Before tax dividends Per share
£m £m p £m £m p
Operating profit before amortisation
of goodwill, amortisation of
acquired additional value of
in-force long-term business and
exceptional items:
– continuing operations 1,218 784 34.8 1,464 919 40.8
–discontinued operations 78 72 3.2 48 40 1.8
1,296 856 38.0 1,512 959 42.6
Adjusted for the following items:
Amortisation of goodwill (135) (135) (6.0) (87) (87) (3.9)
Amortisation of acquired additional
value of in-force long-term business (139) (100) (4.4) (64) (49) (2.2)
Financial Services Compensation Scheme levy –––(31) (22) (1.0)
Integration costs –––(59) (51) (2.3)
Short-term fluctuation in investment return (1,243) (1,071) (47.5) (988) (754) (33.4)
Change in the equalisation provision (57) (40) (1.8) (56) (39) (1.7)
Net (loss)/profit arising on the disposal
of subsidiary undertakings (4) (61) (2.7) 287 285 12.7
(Loss)/profit attributable
to equity shareholders (282) (551) (24.4) 514 242 10.8
Earnings per share has been calculated based on the operating profit before amortisation of goodwill, amortisation of acquired
additional value of in-force long-term business and exceptional items, after tax attributable to equity shareholders for continuing
operations and for total operations, as well as on the profit attributable to equity shareholders. The directors believe the former two
earnings per share figures provide a better indication of operating performance. The calculation of basic earnings per share uses a
weighted average of 2,254 million (2001: 2,250 million) ordinary shares in issue, after deducting shares owned by the employee share
trusts as required by FRS14 “Earnings per share”. The actual number of shares in issue at 31 December 2002 was 2,257 million (2001:
2,255 million).
(b) Diluted earnings per share
Restated
2002 2001
Weighted average Weighted average
Total number of shares Per share Total number of shares Per share
£m m p £m m p
(Loss)/profit attributable to equity shareholders (551) 2,254 (24.4) 242 2,250 10.8
Dilutive effect of share awards and options –4––4(0.1)
Diluted earnings per share (551) 2,258 (24.4) 242 2,254 10.7
17 – Subsidiary undertakings
(a) Acquisitions
During the year ended 31 December 2002, the Group acquired the following companies:
Country of incorporation Percentage acquired Month of acquisition
Dao Heng Assurance Limited Hong Kong 100% May 2002
DBS Kwong On Insurance Company Limited Hong Kong 100% May 2002
Caja de Granada Vida Spain 50% October 2002
On 31 May 2002, the Group extended its bancassurance partnership with DBS Group Holdings Limited (DBS) and acquired 100% of the
issued equity share capital of Dao Heng Assurance and DBS Kwong On Insurance (together DBS Hong Kong), DBS’s life and general
subsidiary in Hong Kong. Total cash consideration was £31 million and net assets on acquisition of DBS Hong Kong were £16 million,
giving rise to goodwill of £15 million. Further amounts may be payable depending on the achievement of performance targets by DBS
Hong Kong.
In October 2002, the Group entered into a new bancassurance partnership with the Spanish savings bank, Caja de Granada. As part of
this transaction, Unicorp Vida, the life and pensions business owned equally by Aviva and Unicaja, and of which Aviva has management
control, acquired 50% of the issued equity share capital and management control of Caja de Granada’s life and pensions agency, Caja
de Granada Vida. The Group’s share of the initial cash consideration paid by Unicorp Vida was £24 million including transaction costs
with further amounts payable if Caja de Granada Vida achieves certain performance targets. The Group’s share of Caja de Granada
Vida’s net assets at the date of acquisition amounted to £1 million, giving rise to goodwill of £23 million.
67 Aviva plc
Annual report + accounts 2002