Note 11 – Earnings per share and adjusted profit on ordinary activities before taxation

a) Earnings per share
 
 
 
 
 
 
 
 
Earnings
per
share
2005
 
pence
 
Profit
for the
year
2005
 
£m
Weighted
average
number
shares
2005
 
million
 
Earnings
per
share
2004
(restated)
pence
 
Profit
for the
year
2004
(restated)
£m
Weighted
average
number
shares
2004
 
million
 
Earnings
per
share
2003
(restated)
pence
 
Profit
for the
year
2003
(restated)
£m
Weighted
average
number
shares
2003
 
million
Basic, including
 exceptional items and
 goodwill amortisation
29.5 908 3,082 35.0 1,074 3,070 11.4 351 3,078
Exceptional operating
  items (note 4(a))
8.1 251 9.0 277 11.4 350
Exceptional
 non-operating
 items (note 4(b))
(2.7) (83) (10.4) (322) 3.2 99
Exceptional financing
 charge (note 4(c))
1.0 31
Exceptional tax credit
  (note 4(d))
(2.5) (79) (2.9) (89) (4.1) (128)
Exceptional minority
  interests (note 4(e))
0.9 28
Goodwill amortisation 3.5 109 3.2 99 3.3 102
Adjusted basic,
 excluding
 exceptional items and
 goodwill amortisation
35.9 1,106 3,082 33.9 1,039 3,070 27.1 833 3,078
Dilutive impact of
 employee share
 options
(0.2) 14 (0.1) 7 (0.1) 10
Dilutive impact of 4.25%
 Exchangeable Bonds
n/a n/a n/a n/a n/a n/a (0.3) 22 110
Adjusted diluted,
 excluding
 exceptional items and
 goodwill amortisation
35.7 1,106 3,096 33.8 1,039 3,077 26.7 855 3,198
Exceptional operating
 items (note 4(a))
(8.1) (251) (9.0) (277) (10.9) (350)
Exceptional
  non-operating
  items (note 4(b))
2.7 83 10.4 322 (3.1) (99)
Exceptional financing
 charge (note 4(c))
(1.0) (31)
Exceptional tax credit
  (note 4(d))
2.5 79 2.9 89 4.0 128
Exceptional minority
  interests (note 4(e))
(0.9) (28)
Goodwill amortisation (3.5) (109) (3.2) (99) (3.2) (102)
Diluted, including
 exceptional items and
 goodwill amortisation
29.3 908 3,096 34.9 1,074 3,077 11.6 373 3,198

Earnings per ordinary share, excluding exceptional items and goodwill amortisation, are provided in order to reflect the underlying performance of the Group.

As at 31 March 2005, there were 7,108,201 outstanding share options in respect of the executive share scheme that were anti-dilutive instruments.

In respect of the year ended 31 March 2003, the potential ordinary shares that related to the 4.25% Exchangeable Bonds were dilutive as they decreased earnings from continuing operations. Consequently, the diluted earnings per share were higher than basic earnings per share for this year because of the effect of losses that arose from discontinued operations.

b) Adjusted profit on ordinary activities before taxation

The following table reconciles profit before taxation on ordinary activities to adjusted profit on ordinary activities before taxation. Adjusted profit on ordinary activities before taxation excludes exceptional items and goodwill amortisation and is provided to reflect the underlying pre-tax performance of the Group.

 
 
 
2005
 
£m
2004
(restated)
£m
2003
(restated)
£m
Profit on ordinary activities before taxation 1,152 1,337 627
Exceptional operating items (note 4(a)) 251 277 350
Exceptional non-operating items (note 4(b)) (83) (322) 99
Exceptional financing charge (note 4(c)) 31
Goodwill amortisation 109 99 102
Adjusted profit on ordinary activities before taxation 1,429 1,391 1,209

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