Unilever 2005 Annual Report Download - page 100

Financial Statements
Unilever Annual Report and Accounts 2005 97
8 Combined earnings per share
Per €0.51 share of Per 1.4p share of
NV ordinary capital PLC ordinary capital
€€€ cents € cents
Combined earnings per share 2005 2004 2005 2004
From total operations
Basic earnings per share 3.88 2.83 58.17 42.46
Diluted earnings per share 3.76 2.72 56.40 40.78
From continuing operations
Basic earnings per share 3.39 2.78 50.87 41.72
Diluted earnings per share 3.29 2.67 49.33 40.08
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 as treasury stock.
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.
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 44; (ii) conversion of the €0.05 NV preference shares, details of
which are set out below and in note 24 on page 124; (iii) the effect of share-based compensation plans, details of which are set out in note 31
on pages 132 to 141; and (iv) the forward equity contract described in note 31 on page 141.
On 15 February 2005, we converted the €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 hedging the Group’s share-based compensation plans. Unilever bought further ordinary shares in
the market during 2005 to the extent required to restore the 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 Millions of
€0.51 share units 1.4p share units
Calculation of average number of share units 2005 2004 2005 2004
Average ordinary capital: NV 571.6 571.6 3 810.5 3 810.5
PLC 436.7 436.7 2 911.5 2 911.5
Less shares held by employee share trusts and companies (37.3) (44.9) (248.7) (299.3)
Combined average number of share units for all bases except diluted earnings per share 971.0 963.4 6 473.3 6 422.7
Add shares issuable in 2038 23.6 23.6 157.5 157.5
Add shares for conversion 2.4 18.9 15.7 125.9
Add dilutive effect of share-based compensation plans and forward equity contract 5.3 5.0 35.5 33.1
Adjusted combined average number of share units for diluted earnings per share basis 1 002.3 1 010.9 6 682.0 6 739.2
€ million € million
Calculation of earnings 2005 2004
Net profit attributable to shareholders’ equity 3 766 2 755
Less preference dividends n/a (28)
Net profit attributed to ordinary capital for basic earnings per share calculations 3 766 2 727
Adjusted net profit attributed to ordinary capital for the diluted earnings per share calculation(a) 3 769 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 2005 amounted to €3 million (2004: €21 million).
Notes to the consolidated accounts
Unilever Group