14.3 Core Earnings per Share

Earnings per share according to IFRS are affected by the purchase price allocation for acquisitions and other special factors. To demonstrate the impact of these effects on earnings and facilitate the comparability of our performance over time, we determine additional indicators – core EBIT Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards. , core net income and Core earnings per share Earnings per share, plus / minus amortization and impairment losses / impairment loss reversals of intangible assets and impairment losses / impairment loss reversals on property, plant and equipment, plus special charges, minus special gains (other than amortization and impairment losses / impairment loss reversals), plus / minus the related tax effects and the share of the adjustments attributable to noncontrolling interest; this indicator facilitates the comparability of performance over time. It is not defined in the International Financial Reporting Standards. – which are not defined in the International Financial Reporting Standards.

Core EBIT is determined by first eliminating from EBIT (income after income taxes, plus income taxes, plus financial result), which is not defined in the International Financial Reporting Standards, all amortization and impairment losses / impairment loss reversals on intangible assets, impairment losses / impairment loss reversals on property, plant and equipment, and special items (other than amortization and impairment losses / impairment loss reversals). This core EBIT Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards. is then used to calculate core net income, which comprises the financial result (as per income statements), income taxes (as per income statements), income after income taxes attributable to noncontrolling interest (as per income statements), special items in the financial result, special items in income taxes, tax effects related to amortization, impairment losses / impairment loss reversals and special items, and the above-mentioned adjustments attributable to noncontrolling interest.

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. Core earnings per share Earnings per share, plus / minus amortization and impairment losses / impairment loss reversals of intangible assets and impairment losses / impairment loss reversals on property, plant and equipment, plus special charges, minus special gains (other than amortization and impairment losses / impairment loss reversals), plus / minus the related tax effects and the share of the adjustments attributable to noncontrolling interest; this indicator facilitates the comparability of performance over time. It is not defined in the International Financial Reporting Standards. are determined for both continuing and Discontinued operations Business operations already divested or earmarked for divestiture in the near future; opposite of continuing operations . In 2015, we improved core earnings per share from Continuing operations Revenue and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations. by 16.0% to €6.83 (2014: €5.89).

Core Earnings per Share

 

 

4th Quarter 2014

4th Quarter 2015

 

Full Year 2014

Full Year 2015

 

 

€ million

€ million

 

€ million

€ million

2014 figures restated

EBIT (as per income statements)

 

549

908

 

5,395

6,250

Amortization and impairment losses / loss reversals on intangible assets

 

504

529

 

1,581

1,802

Impairment losses / loss reversals on property, plant and equipment

 

57

55

 

96

115

Special items (other than amortization and impairment losses / loss reversals)

 

382

38

 

370

683

Core EBIT

 

1,492

1,530

 

7,442

8,850

Financial result (as per income statements)

 

(347)

(164)

 

(981)

(1,005)

Special items in the financial result

 

13

(120)

 

23

(150)

Income taxes (as per income statements)

 

16

(163)

 

(1,071)

(1,227)

Special items in income taxes

 

48

(39)

 

48

(39)

Tax effects related to amortization, impairment losses / loss reversals and special items

 

(245)

(149)

 

(573)

(755)

Income after income taxes attributable to noncontrolling interest (as per income statements)

 

(6)

30

 

(17)

12

Above-mentioned adjustments attributable to noncontrolling interest

 

(39)

 

(39)

Core net income from continuing operations

 

971

886

 

4,871

5,647

 

 

Shares

Shares

 

Shares

Shares

Number of issued ordinary shares

 

826,947,808

826,947,808

 

826,947,808

826,947,808

Core earnings per share from continuing operations (€)

 

1.17

1.07

 

5.89

6.83

Core earnings per share from discontinued operations (€)

 

0.02

0.01

 

0.13

0.12

Core earnings per share from continuing and discontinued operations (€)

 

1.19

1.08

 

6.02

6.95

The calculation of earnings per share in accordance with IFRS is explained in Note [16] to the consolidated financial statements.