Reebok 2008 Annual Report Download - page 195

adidas Group Annual Report 2008 191
29 Earnings per share
Basic earnings per share are calculated by dividing the net income attributable to shareholders
by the weighted average number of shares outstanding during the year.
Dilutive potential shares arose under the Management Share Option Plan (MSOP) of adidas AG,
which was implemented in 1999 see Note 33. As the required performance criteria for the
exercise of the stock options of all tranches of the share option plan have been fulfi lled, dilutive
potential shares impact the diluted earnings per share calculation.
It is also necessary to include dilutive potential shares arising from the convertible bond
issuance in October 2003 in the calculation of diluted earnings per share as at December 31,
2008 and 2007, respectively, as the required conversion criteria were fulfi lled at the balance
sheet date see Note 15. As a result, the convertible bond is assumed to have been converted
into ordinary shares and the net income is adjusted to eliminate the interest expense less the
tax effect.
Earnings per share
Year ending
Dec. 31, 2008
Year ending
Dec. 31, 2007
Net income attributable to shareholders (€ in millions) 642 551
Weighted average number of shares 197,562,346 203,594,975
Basic earnings per share (in €) 3.25 2.71
Net income attributable to shareholders (€ in millions) 642 551
Interest expense on convertible bond, net of taxes (€ in millions) 13 12
Net income used to determine diluted earnings per share (€ in millions) 655 563
Weighted average number of shares 197,562,346 203,594,975
Weighted share options 86,542 187,887
Weighted assumed conversion convertible bond 15,684,315 15,684,315
Weighted average number of shares for diluted earnings per share 213,333,203 219,467,177
Diluted earnings per share (in €) 3.07 2.57
Notes – Additional Information
30 Segmental information
The Group operates predominately in one industry segment – the design, wholesale and market-
ing of athletic and sports lifestyle products. The Group is currently managed by brands.
Certain Group functions are centralised and an allocation of these functions to specifi c segments
is not considered to be meaningful. This includes functions such as central treasury, worldwide
sourcing as well as other headquarters departments. Assets, liabilities, income and expenses
relating to these corporate functions are presented in the HQ /Consolidation column together
with other non-allocable items and intersegment eliminations.
The Reebok segment includes the brands Reebok, Reebok-CCM Hockey and Rockport.
The TaylorMade- adidas Golf segment includes the brands TaylorMade, adidas Golf and
Ashworth.
Information about the Group’s segments in accordance with the management approach is
presented on the following page.
There are no intersegment sales between the brands. Net sales to third parties are shown in the
geographic market in which the revenues are realised. The global sourcing function is included
in the HQ /Consolidation column. Transactions between the segments are based on the dealing-
at-arm’s-length principle.
Segment assets include all operating assets and comprise mainly accounts receivable, inven-
tory as well as property, plant and equipment and intangible assets. Segment liabilities comprise
operating liabilities and consist principally of trade and other payables as well as accrued
liabilities and provisions. Non-allocable items, including fi nancial assets or assets and liabilities
relating to income taxes and borrowings, are included in the HQ /Consolidation column.
Capital expenditure as well as amortisation and depreciation relate to segment assets.