Earnings per share 34

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.

In 2009, dilutive potential shares arose under the Management Share Option Plan (MSOP) of adidas AG, which was implemented in 1999. As the required performance criteria for the exercise of the stock options of all tranches of the share option plan were fulfilled in 2009, dilutive potential shares impacted the diluted earnings per share calculation for the year ending December 31, 2009 see Note 38.

It was also necessary to include dilutive potential shares arising from the convertible bond issuance in October 2003 in the calculation of diluted earnings per share of the 2009 financial year until conversion as the required conversion criteria were fulfilled at the balance sheet date 2009 see Note 17. During the financial year 2009, the convertible bond was assumed to be converted into ordinary shares and the net income is adjusted to eliminate the interest expense less the tax effect.

Following the full conversion of the Group’s convertible bond in the fourth quarter of 2009 and as no share options are outstanding anymore from the MSOP, the Group had no dilutive potential shares for the year ending December 31, 2010.