Reebok 2007 Annual Report Download - page 91

087
ANNUAL REPORT 2007 --- adidas Group
03
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS GROWS 14 %
The Group’s net income attributable to shareholders increased
14 % to € 551 million in 2007 from € 483 million in 2006. This
development was in line with initial Management expectations
that targeted an increase at a rate approaching 15 %. The Group’s
higher operating profi t, lower net fi nancial expenses and
lower minority interests each contributed to this development.
The Group’s tax rate increased by 0.4 percentage points to
31.8 % in 2007 (2006: 31.4 %). The non-recurrence of a one-time
tax benefi t, which had a positive impact in the prior year, was
partly compensated for by favorable tax rate changes in several
countries.  see Note 27, p. 185
MINORITY INTERESTS DECLINE BY 71 % The Group’s minority
interests decreased 71 % to € 4 million in 2007 from € 13 mil-
lion in 2006. The strong decline in minority interests compared
to the prior year was primarily due to the buyout of the adidas
joint venture partner in Korea. Effective September 1, 2006,
the Group purchased the remaining 49 % of shares.
BASIC AND DILUTED EARNINGS PER SHARE BOTH INCREASE
14 % In line with the increase of the Group’s net income attrib-
utable to shareholders, basic earnings per share increased
14 % to € 2.71 in 2007 versus € 2.37 in 2006. The Group’s total
number of shares outstanding increased by 92,100 shares to
203,628,960 at the end of 2007 from 203,536,860 at the end of
2006 as a result of shares from stock options exercised as part
of Tranches II, III, IV and V of the Management Share Option
Plan (MSOP) of adidas AG. Consequently, the weighted average
number of shares used in the calculation of basic earnings per
share was 203,594,975 (2006 average: 203,386,104). Diluted
earnings per share in 2007 also increased 14 % to € 2.57 from
€ 2.25 in the prior year. The weighted average number of
shares used in the calculation of diluted earnings per share
was 219,467,177 (2006 average: 219,399,522). The number of
diluted shares outstanding at year-end 2007 was 219,485,875
(2006: 219,485,875). The dilutive effect largely results from
approximately sixteen million additional potential shares that
could be created in relation to our outstanding convertible
bond, for which conversion criteria were fi rst met at the end
of the fourth quarter of 2004.
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS
€
in million
s
2003
2004
2005
2006 1)
2007
1
) Including Reebok business segment from February 1, 2006 onwards.
I
ncludin
g
Gre
g
Norman apparel business from February 1, 2006 to November
3
0, 2006.
314
383
483
551
260
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS BY QUARTER 1)
€
in milli
o
n
s
Q1 2006
Q
1 200
7
Q2 2006
Q
2 200
7
Q3 2006
Q3
200
7
Q4 2006
Q
4 200
7
1)
Includin
g
Reebok business se
g
ment from February 1, 2006 onwards.
I
ncludin
g
Gre
g
Norman apparel business from February 1, 2006 to November
3
0, 2006.
2
9
8
244
1
0
4
82
128
144
21
13