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## NOTES TO THE CONSOLIDATED INCOME STATEMENTS OF TRANSAMERICA FINANCE CORPORATION 

## REVENUE RECOGNITION 

Finance charges are generally recognized on an effective yield method. Charges collected in advance on distribution finance receivables are taken into income on a straight-line basis over the periods to which the charges relate, which generally average ninety days. Related origination and other non-refundable fees and direct origination costs are deferred and amortized as adjustments of finance charges over the contractual life of the transactions. Accrual of finance charges is suspended on accounts that contractually become past due in excess of ninety days or at the discretion of management. 

Leasing revenues are earned on service, rental and term operating leases. Rental revenues are recognized in the period billed. Revenues from service contract minimum and term leases are recognized on a straight-line basis over the lease term. Initial direct costs are amortized on a straight-line basis over the lease term. 

Real estate service revenues are primarily fees for life of loan property tax payment and reporting services and flood certifications. Life of loan service fees are deferred and recognized in income over the expected service period. Transamerica Finance Corporation periodically reviews its revenue recognition method to determine the expected life of a contract and/or whether prepayment speeds used have changed. Accordingly, TFC may adjust the deferral period to reflect current trends. 

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TFC employed 2,104 people at December 31, 2003 (2002: approximately 3,900 and 2001: approximately 4,700). 

## 33 NET INCOME PER SHARE 

The following table provides the information underlying the calculation of net income per share. Net income per share excludes dilution and is computed by dividing net income available to common shareholders, which is after deduction of dividends on the preferred shares, by the weighted average number of common shares (EUR 0.12 par value) outstanding. Fully diluted net income per share is computed based on the weighted average number of common shares outstanding during the year plus dilutive potential common shares considered outstanding during the year (treasury stock method). The weighted average number of common shares has been adjusted retroactively for all periods presented to reflect stock dividends. 

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