ANNUAL REPORT 2004 - ELMOS Semiconductor AG

MANAGEMENT BOARD ELMOS – THE COMPANY THE ELMOS SHARE CORPORATE GOVERNANCE
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The average fair value of share options was 14.23 Euro for the first and the second
tranche, 4.40 Euro for the third tranche, and 5.07 Euro for the fourth tranche. The fair
value of share options was calculated as of the date of grant using the Black-Scholes
option pricing model based on the following assumptions:
Fair value assumptions
Because the grant of additional share options in future years is anticipated, the pro
forma earnings presented above are not indicative of the future amounts.
10. EARNINGS PER COMMON SHARE
Basic and diluted earnings per common share were determined as follows:
Reconciliation of shares
11. ACCUMULATED OTHER COMPREHENSIVE INCOME
2004 2003
Weighted-average common shares outstanding 19,300,000 19,300,000
Effect of potentially diluting share options* 132,619 12,569
Weighted-average common shares outstanding assuming dilution 19,432,619 19,312,569
* determined applying the treasury stock method according to SFAS 128
Tranche 1+2 Tranche 3 Tranche 4
Dividend yield 1.4% 2.0% 2.0%
Expected volatility 61.7 59.1 59.1
Risk-free interest rate at grant date 6% 5.5% 5.5%
Expected life in years 5 years 5 years 5 years
Total accumulated other comprehensive income represents the success-ineffective
net change in equity from sources other than transactions with shareholders, inclu-
ding net earnings. The main components of other comprehensive income that relate
to ELMOS are success-ineffective foreign currency translation adjustments and unre-
alized gains or losses on the company’s available-for-sale securities net of taxes.