Management Report

7. Core Earnings Per Share

Earnings per share according to IFRS are affected by the purchase price allocation for acquisitions and other special factors. To enhance comparability, we also determine core net income after elimination of the amortization of intangible assets, asset write-downs (including any impairment losses), and special items in EBITDA including the related tax effects.

From this core net income we calculate core earnings per share in the same way as earnings per share. Core earnings per share form the basis for our dividend policy. For the second quarter of 2010, core earnings per share amounted to €1.15 (Q2 2009: €1.05).

Calculation of Core EBIT and Core Earnings Per Share				[Table 14]
	2nd Quarter 2009	2nd Quarter 2010	1st Half 2009	1st Half 2010
	€ million	€ million	€ million	€ million
EBIT as per income statements	1,021	1,005	1,994	2,202
Amortization and write-downs of intangible assets	368	480	746	832
Write-downs of property, plant and equipment	29	8	42	9
Special items (other than write-downs)	56	123	90	200
Core EBIT	1,474	1,616	2,872	3,243
Non-operating result (as per income statements)	(292)	(261)	(626)	(505)
Income taxes (as per income statements)	(199)	(220)	(414)	(479)
Tax effects related to amortization, write-downs and special items	(135)	(183)	(262)	(312)
Income after taxes attributable to non-controlling interest (as per income statements)	2	1	3	0
Core net income	850	953	1,573	1,947
Financing expenses for the mandatory convertible bond, net of tax effects	19	0	47	0
Adjusted core net income	869	953	1,620	1,947
	Shares	Shares	Shares	Shares
Weighted average number of issued ordinary shares	784,983,834	826,947,808	774,720,762	826,947,808
(Potential) shares (to be) issued upon conversion of the mandatory convertible bond	40,823,622	0	50,328,170	0
Adjusted weighted average total number of issued and potential ordinary shares	825,807,456	826,947,808	825,048,932	826,947,808
Core earnings per share (€)	1.05	1.15	1.96	2.35

The calculation of earnings per share in accordance with IFRS is explained in the Notes to the Condensed Consolidated Interim Financial Statements. The (adjusted) core net income, core earnings per share and core EBIT are not defined in the IFRS.

7. Core Earnings Per Share

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