stemming in large part from a loss at Disco due principally to the general decline in economic conditions. Net income also
declined as a result of an increase in interest expense, which was mainly due to assumed debt in connection with
acquisitions.
Net Income (Loss) after Preferred Dividends per Common Share - Basic
- Fiscal 2002
Net income (loss) after preferred dividends per common share-basic amounted to a net loss of EUR 1.34 per common
share in fiscal 2002 compared to net income of EUR 0.83 per common share in fiscal 2001. Net income (loss) after
preferred dividends per common share-basic is calculated as net income (loss) after preferred dividends, divided by
the weighted average number of common shares outstanding during each period.
The weighted average number of common shares outstanding used for these calculations was higher in fiscal 2002 than
in fiscal 2001 primarily as a result of the impact of the offering of common shares and ADSs in September 2001.
- Fiscal 2001
Net income after preferred dividends per common share-basic decreased by 32.0% in fiscal 2001 from EUR 1.22 in fiscal
2000 to EUR 0.83 in fiscal 2001.
The weighted average number of common shares outstanding used for these calculations was higher in fiscal 2002 than in
fiscal 2001 primarily as a result of the impact of the accelerated offering of common shares and ADSs in September 2001.
Adjustments to conform to US GAAP
For fiscal 2002, our net loss under US GAAP was EUR 4.3 billion compared to a net loss under Dutch GAAP of EUR 1.2
billion. Net loss per common share - basic as determined in accordance with US GAAP was EUR 4.67 per share in fiscal
2002 compared to net loss per common share - basic of EUR 0.30 in fiscal 2001. The most significant reconciling item
in fiscal 2002 related to the impairment of goodwill. Under Dutch GAAP, we recognized charges of EUR 1.3 billion for the
impairment of goodwill and other intangible assets. Under US GAAP, we adopted SFAS No. 142 on December 31, 2001.
Following this standard, we no longer amortize goodwill and other intangible assets with indefinite useful lives under
US GAAP but, instead, we test these assets for impairment annually, and more frequently if circumstances indicate a
possible impairment. Upon the adoption of SFAS No. 142, we recorded under US GAAP a transitional impairment charge
of EUR 2.8 billion, which is recorded as a cumulative effect of a change in accounting principle for goodwill, and an
additional aggregate impairment charge for goodwill and other intangible assets of EUR 751 million under US GAAP,
which is recorded as a current-year impact of impairment of goodwill and other intangible assets. The most significant
portions of this additional goodwill impairment charge related to USF in respect of which we recorded a transitional loss of
EUR 2.1 billion and additional impairment losses of EUR 647 million, respectively. Under Dutch GAAP, a similar goodwill
impairment charge was not recognized because all goodwill prior to December 2000 related to the acquisition of USF was
charged directly to shareholders' equity at the time of the acquisition.
For fiscal 2002, we recognized additional intangible asset amortization under US GAAP of EUR 25 million, primarily
because certain intangible assets were deemed to have an indefinite useful life as defined under SFAS No. 142 and,
therefore, are no longer amortized under US GAAP. Other reconciling differences between Dutch GAAP and US GAAP in
fiscal 2002 included deferral of gain on sale and leaseback of property, income tax effects of reconciling items, valuation
of certain put options and other minor items. In the aggregate, these individually less significant reconciling differences
reduced our loss by EUR 155 million, primarily because we recognized EUR 253 million less goodwill amortization under
US GAAP than under Dutch GAAP and because of the difference in our share in income of joint ventures and equity
investees of EUR 26 million.
In fiscal 2001, the net loss under US GAAP was EUR 254 million compared to net income of EUR 750 under Dutch
GAAP. Net loss per common share - basic as determined in accordance with US GAAP was EUR 0.30 per share in fiscal
2001 compared to net income per common share - basic of EUR 0.60 per share in fiscal 2000. The most significant
reconciling item related to our share in the net loss of joint ventures and equity investees of EUR 588 million in fiscal
2001. This item reflects the difference between our share in the loss of joint ventures and equity investees under Dutch
GAAP and US GAAP. This difference relates primarily to a goodwill impairment loss of EUR 505 million in DAIH in fiscal
2001. Under Dutch GAAP, a similar impairment loss was not recognized because all goodwill related to joint ventures and
equity investees was charged directly to shareholders' equity upon acquisition. The other significant differences related to
additional goodwill amortization under US GAAP, the recognition of a change in the fair value of derivatives and the gain
on sale and leaseback transactions.
44
