Unilever 2007 Annual Report Download - page 87

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Unilever Annual Report and Accounts 2007 85
Financial statements continued
Notes to the consolidated accounts Unilever Group
7 Combined earnings per share
€€€
Combined earnings per share 2007 2006 2005
From continuing operations
Basic earnings per share 1.32 1.19 1.07
Diluted earnings per share 1.28 1.15 1.04
From discontinued operations
Basic earnings per share 0.03 0.46 0.22
Diluted earnings per share 0.03 0.45 0.21
From total operations
Basic earnings per share 1.35 1.65 1.29
Diluted earnings per share 1.31 1.60 1.25
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.
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 are set out below and in note 16 on page 94; (iii) the effect of share-based compensation plans, details of which are set out in note 29
on pages 117 to 119; and (iv) the forward equity contract described in note 29 on page 119.
On 15 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’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 share units
Calculation of average number of share units 2007 2006 2005
Average number of shares: NV 1 714.7 1 714.7 1 714.7
PLC 1 310.2 1 310.2 1 310.2
Less shares held by employee share trusts and companies (150.3) (141.6) (111.9)
Combined average number of share units for all bases except diluted earnings per share 2 874.6 2 883.3 2 913.0
Add shares issuable in 2038 70.9 70.9 70.9
Add shares for conversion ––7.1
Add dilutive effect of share-based compensation plans and forward equity contract 30.6 18.3 16.0
Adjusted combined average number of share units for diluted earnings per share basis 2 976.1 2 972.5 3 007.0
€ million € million € million
Calculation of earnings 2007 2006 2005
For earnings per share from total operations:
Net profit attributable to ordinary capital for total operations 3 888 4 745 3 766
For earnings per share from continuing operations:
Net profit from continuing operations 4 056 3 685 3 335
Minority interest in continuing operations (248) (266) (205)
Net profit attributable to ordinary capital for continuing operations 3 808 3 419 3 130
The numbers of shares included in the calculation of earnings per share is an average for the period. These numbers are influenced by the share
buy-back programme that we undertook during 2007. During that period the following movements in shares took place:
Millions of share units
Number of shares at 31 December 2006 (net of treasury stock) 2 889.9
Net movements in shares under incentive schemes 29.7
Share buy-back (66.5)
Number of shares at 31 December 2007 2 853.1
On 11 February 2008, Unilever announced a share buy-back programme of at least €1.5 billion in 2008.