Notes to the Accounts

9. Earnings per share

In order to show results from operating activities on a comparable basis an adjusted earnings per equity share has been calculated which excludes profits or losses on the sale of fixed assets and investments, businesses and associates (see note 4 and note 5), Year 2000 compliance costs and integration costs in respect of the acquisition of Simon & Schuster (see note 2). Following the prospective implementation of FRS10 ‘Goodwill and Intangible Assets’, goodwill amortisation has also been excluded from adjusted earnings in order to show results on a comparable basis.

	£m	earnings per share pence	£m	earnings per share pence
Basic earnings	437	74.1	38	6.6
Less:
(Profit) on sale of fixed assets and investments: continuing operations	(142)	(24.1)	(23)	(4.0)
(Profit) on sale of businesses and associates: continuing operations	(50)	(8.5)	(33)	(5.8)
(Profit)/loss on sale of businesses and associates: discontinued operations	(215)	(36.4)	212	37.0
(Profit)/loss on sale of businesses and associates by an associate: continuing operations	(11)	(1.9)	1	0.2
Add:
Goodwill amortisation	12	2.0	–	–
Simon & Schuster integration costs	120	20.3	–	–
Year 2000 compliance costs	7	1.2	–	–
Taxation on above items	90	15.3	5	0.9
Adjusted earnings	248	42.0	200	34.9
Earnings	437		38
Tax on the conversion of ordinary shares	(1)		(1)
Diluted earnings	436		37
Weighted average number of equity shares (millions) – for earnings and adjusted earnings	589.8		572.8
Effect of dilutive share options	5.1		4.7
Weighted average number of equity shares (millions) – for diluted earnings	594.9		577.5
Adjusted earnings per equity share	42.0p		34.9p
Earnings per equity share	74.1p		6.6p
Diluted earnings per equity share	73.3p		6.4p

NOTE: 1997 weighted average number of equity shares has been restated in accordance with FRS14 ‘Earnings Per Share’