Tesco 2011 Annual Report Download - page 117

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NOTE 9 EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing the profit attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the financial year.
Diluted earnings per share amounts are calculated by dividing the profit attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the financial year adjusted for the effects of potentially dilutive options. The dilutive effect is calculated on the full
exercise of all potentially dilutive ordinary share options granted by the Group, including performance-based options which the Group considers to have
been earned.
2011 2010
From continuing operations Basic
Potentially
dilutive
share options Diluted Basic
Potentially
dilutive
share options Diluted
Profit (£m) 2,655 – 2,655 2,327 – 2,327
Weighted average number of shares (millions) 8,020 41 8,061 7,933 39 7,972
Earnings per share (pence) 33.10 (0.16) 32.94 29.33 (0.14) 29.19
There have been no transactions involving ordinary shares between the reporting date and the date of approval of these financial statements which
would significantly change the earnings per share calculations shown above.
Reconciliation of non-GAAP underlying diluted earnings per share
2011 2010
£m pence/share £m pence/share
Profit 2,655 32.94 2,327 29.19
Adjustments for:
IAS 32 and IAS 39 ‘Financial Instruments’ – fair value remeasurements (19) (0.23) (151) (1.90)
IAS 19 ‘Employee Benefits’ – non-cash Group Income Statement charge for pensions 113 1.40 24 0.30
IAS 17 ‘Leases’ – impact of annual uplifts in rent and rent-free periods 50 0.62 41 0.52
IFRS 3 ‘Business Combinations’ – intangible asset amortisation charges and
costs arising from acquisitions 42 0.52 127 1.59
IFRIC 13 ‘Customer Loyalty Programmes’ – fair value of awards 8 0.10 14 0.18
IAS 36 ‘Impairment of Assets’ – impairment of goodwill arising on acquisitions 55 0.68 131 1.64
Restructuring costs 29 0.36 33 0.41
Tax effect of adjustments at the effective rate of tax (2011 – 24.1%*; 2010 – 25.4%) (54) (0.67) (22) (0.27)
Underlying earnings from operations 2,879 35.72 2,524 31.66
* The effective tax rate of 24.1% (2010 – 25.4%) excludes certain permanent differences on which tax relief is not available.
TESCO PLC Annual Report and Financial Statements 2011
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Overview Business review Governance Financial statements