08:55     MTR CORPORATION<00066> - Results Announcement (2)                   

                                                                              
    3.      INCOME TAX                                                        
    Income tax in the consolidated profit and loss account represents:        
                                                                              
                                            Year ended 31 December            
    HK$ Million                             2004            2003              
                                                                              
    Current tax - overseas                  4               4                 
    Deferred tax expense relating to the                                      
    origination and reversal of temporary                                     
    differences                             691             443               
    Deferred tax expense resulting from                                       
    increase in tax rate from 16.0% to                                        
    17.5% on deferred tax balances                                            
    at 1 January 2003                       -               300               
                                            -----------     --------          
                                            695             747               
    Share of non-controlled subsidiary's                                      
    taxation                                  5             1                 
                                            ------------    ------            
                                            700             748               
                                            ======          ======            
                                                                              
    No provision for current Hong Kong profits tax has been made in the       
    consolidated profit and loss account in respect of the Company and its    
    subsidiaries, as the Company and its subsidiaries either have substantial 
    accumulated tax losses brought forward which are available for set off    
    against current year's assessable profits or have sustained tax losses for
    the year ended 31 December 2004.  Taxation for overseas subsidiaries is   
    charged at the appropriate current rates of taxation ruling in the        
    relevant countries.                                                       
                                                                              
                                                                              
    4.      DIVIDEND                                                          
                                                                              
    The Board has recommended to pay a final dividend of HK$0.28 per share.   
    The Company proposes that a scrip dividend election will be offered to    
    shareholders with Hong Kong addresses. Subject to the approval of the     
    shareholders at the forthcoming Annual General Meeting, the final dividend
    will be distributed on or about 21 June 2005 to shareholders whose names  
    appear on the Register of Members of the Company as at the close of       
    business on 1 April 2005.  The Company's majority shareholder, The        
    Financial Secretary Incorporated, has agreed to elect to receive all or   
    part of its entitlement to dividends in the form of scrip to the extent   
    necessary to ensure that a maximum of 50% of the total dividend paid by   
    the Company will be in the form of cash.                                  
                                                                              
                                                                              
    5.      EARNINGS PER SHARE                                                
    The calculation of basic earnings per share is based on the profit for the
    year ended 31 December 2004 attributable to shareholders of HK$4,496      
    million (2003: HK$4,450 million) and the weighted average number of       
    ordinary shares of 5,331,253,996 in issue during the year (2003: 5,214,   
    028,094).                                                                 
                                                                              
    The calculation of diluted earnings per share is based on the profit for  
    the year ended 31 December 2004 attributable to shareholders of HK$4,496  
    million (2003: HK$4,450 million) and the weighted average number of       
    ordinary shares of 5,337,217,673 in issue during the year (2003: 5,217,   
    462,182) after adjusting for the number of dilutive potential ordinary    
    shares under the employee share option schemes.