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4.3 Core Earnings Per Share

Earnings per share according to IFRS are affected by the purchase price allocation for acquisitions and other special factors. To enhance comparability, we also determine core net income from continuing operations 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, which is that the dividend should be between 30% and 40% of core earnings per share.

Core earnings per share in 2009 amounted to €3.64 (2008: €4.17). The proposed dividend of €1.40 is thus equivalent to 38.5% of core earnings per share (2008: 33.6%).

Calculation of Core EBIT and Core Earnings Per Share		[Table 3.17]
	2008	2009
	€ million	€ million
EBIT as per income statements	3,544	3,006
Amortization and write-downs of intangible assets	1,550	1,537
Write-downs of property, plant and equipment	88	88
Special items (other than write-downs)	665	657
Core EBIT	5,847	5,288
Non-operating result (as per income statements)	(1,188)	(1,136)
Income taxes (as per income statements)	(636)	(511)
Tax adjustment	(691)	(685)
Income after taxes attributable to non-controlling interest (as per income statements)	(5)	0
Core net income from continuing operations	3,327	2,956
Financing expenses for the mandatory convertible bond, net of tax effects	112	47
Adjusted core net income from continuing operations	3,439	3,003
	Shares	Shares
Weighted average number of issued ordinary shares	764,342,029	801,050,237
(Potential) shares (to be) issued upon conversion of the mandatory convertible bond	59,893,122	24,955,936
Adjusted weighted average total number of issued and potential ordinary shares	824,235,151	826,006,173
Core earnings per share from continuing operations (€)	4.17	3.64

The calculation of earnings per share in accordance with IFRS is explained in Note [16] to the consolidated financial statements. The (adjusted) core net income from continuing operations, core earnings per share and core EBIT are not defined in the IFRS.