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Unilever Annual Report & Accounts and Form 20-F 2003 89
Notes to the consolidated accounts
Unilever Group
7 Combined earnings per share
Per €0.51 share of NV ordinary capital Per 1.4p share of PLC ordinary capital
€€€€ cents € cents € cents
2003 2002 2001 2003 2002 2001
Restated Restated Restated Restated
Basic earnings per share 2.82 2.14 1.66 42.33 32.16 24.86
Diluted earnings per share 2.74 2.08 1.61 41.09 31.20 24.19
Basic earnings per share before exceptional items and
amortisation of goodwill and intangible assets 4.02 3.95 3.39 60.31 59.27 50.80
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 share units representing the combined ordinary capital of NV and PLC in issue during the year, after deducting shares held to meet
Unilever employee share options which are not yet exercised. For the calculation of combined ordinary capital, the exchange rate of
£1 = Fl. 12 = €5.445 has been used, in accordance with the Equalisation Agreement.
Earnings per share before exceptional items and amortisation of goodwill and intangible assets is provided in this Annual Report & Accounts
because the Directors believe it better explains the ongoing trends in the Group’s performance during the duration of the Path to Growth
programme. This measure is an important component of the targets on which Directors’ annual performance bonuses are based. United
Kingdom Financial Reporting Standard 14 requires the company to provide a reconciliation of earnings in the notes to the accounts in these
circumstances. This is set out below.
The calculations of diluted earnings per share are based on (a) conversion into PLC ordinary shares of the shares in a group company which are
convertible in the year 2038 as described in ‘Control of Unilever’ on page 152, and (b) the exercise of share options, details of which are set out
in note 29 on page 116.
Calculation of average number of share units:
Millions of €0.51 share units Millions of 1.4p share units
2003 2002 2001 2003 2002 2001
Average ordinary capital: NV 571.6 571.6 571.6 3 810.5 3 810.5 3 810.5
PLC 436.7 436.7 436.7 2 911.5 2 911.5 2 911.5
less: shares held by employee
share trusts and companies (39.4) (31.6) (25.5) (262.6) (210.4) (169.7)
Combined average number of share units for
all bases except diluted earnings per share 968.9 976.7 982.8 6 459.4 6 511.6 6 552.3
add: shares issuable in 2038 23.6 23.6 23.6 157.5 157.5 157.5
add: shares under option 42.2 35.3 23.5 281.4 235.3 156.3
less: shares issuable at fair value (36.6) (29.0) (19.9) (244.0) (193.6) (132.7)
Adjusted combined average number of share units for
diluted earnings per share basis 998.1 1 006.6 1 010.0 6 654.3 6 710.8 6 733.4
Calculation of earnings:
€ million € million € million
2003 2002 2001
Restated Restated
Net profit 2 762 2 136 1 680
less: preference dividends (27) (42) (51)
Net profit attributed to ordinary capital for basic and diluted earnings per share calculations 2 735 2 094 1 629
add: exceptional items net of tax 67 550 329
add: amortisation of goodwill and intangible assets net of tax 1 094 1 216 1 371
Net profit attributed to ordinary capital before exceptional items and amortisation 3 896 3 860 3 329