 Operating expenses
| |
2005 |
2004 |
| |
|
|
Employee benefit costs |
637 |
590 |
Depreciation, amortisation and impairment |
42 |
44 |
Other operating expenses |
316 |
294 |
| |
995 |
928 |
Employee benefit costs |
2005 |
2004 |
| |
|
|
Salaries and wages |
502 |
468 |
Compulsory social security contributions |
83 |
76 |
Contributions to defined contribution plans |
5 |
5 |
Cost for defined benefit plans |
3 |
4 |
Cost of share based payments plans |
6 |
5 |
Other |
38 |
32 |
| |
637 |
590 |
Depreciation, amortisation and impairment |
2005 |
2004 |
| |
|
|
Depreciation property and equipment |
27 |
31 |
Amortisation software |
10 |
13 |
Impairment loss software |
5 |
- |
| |
42 |
44 |
The impairment loss software comprises the write down of a software system in France which is no longer used.
 Finance costs
| |
2005 |
2004 |
| |
|
|
Interest income |
2 |
2 |
Interest expense |
-28 |
-43 |
| |
-26 |
-41 | Interest expense in 2004 included the effect of fixed (6.1%) interest rate swaps over €419 million of debt that the Group entered into in 1999 and which expired in November 2004.
 Share of profit of associates (after tax)
| |
2005 |
2004 |
| |
|
|
Share in associates’ profit for the period |
1 |
1 |
Gain on disposal of TriNet |
15 |
- |
| |
16 |
1 | In June 2005 the investment in TriNet was disposed of realising a net profit of €15 million after tax.
 Income tax expense
Recognised in the income statement |
2005 |
2004 |
| |
|
|
Current tax |
67 |
67 |
Deferred tax (note 15) |
-3 |
-1 |
Income tax expense for the year |
64 |
66 | Vedior’s operations are subject to income taxes in various foreign jurisdictions with a weighted average statutory income tax rate of 30.0% (2004: 29.9%). Reconciliation of effective tax rate
The reconciliation between the effective tax rate and the weighted average statutory income tax rate is as follows:
| |
2005
€ |
2005
% |
2004
€ |
2004
% |
| |
|
|
|
|
Profit before tax |
222 |
|
191 |
|
Share of profit of associates (after tax) |
-16 |
|
-1 |
|
| |
206 |
|
190 |
|
Weighted average income tax rate |
62 |
30.0% |
57 |
29.9% |
Non-deductible expenses |
5 |
2.6% |
3 |
1.6% |
Benefit from tax facilities |
-3 |
-1.7% |
-3 |
-1.5% |
Loss carry forwards not recognised |
|
|
2 |
1.2% |
Over provided in previous years |
-1 |
-0.5% |
|
|
Other 1) |
1 |
0.6% |
7 |
3.4% |
Effective tax rate |
64 |
31.0% |
66 |
34.6% | 1) Includes tax effect on disposals in 2004.
Deferred tax recognised directly in equity |
2005 |
2004 |
| |
|
|
Relating to share based payments |
- |
-1 |
| |
- |
-1 |  Earnings per share
The calculation of the basic and diluted earnings per share attributable to ordinary shares is based on the following data:
Earnings
Profit attributable to holders of ordinary shares |
2005 |
2004 |
| |
|
|
Profit for the period |
154 |
116 |
Payments on preference shares |
-2 |
-4 |
Profit attributable to holders of ordinary shares |
152 |
112 |
Special items (net of tax) |
-15 |
-7 |
Profit excluding special items, attributable to holders of ordinary shares |
137 |
105 | Special items include the gain on the disposal of TriNet in 2005 and in 2004, the disposal of the Group’s 51% interest in Niscom in Japan and the disposal of Sapphire in France.
Number of shares
Weighted average number of ordinary shares
in thousands |
2005 |
2004 |
| |
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
167,893 |
165,506 |
Effect of dilutive potential ordinary shares from share based payment plans |
2,380 |
3,042 |
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
170,273 |
168,548 |
|