28 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 32. As the required performance criteria for the exercise of the stock options of all tranches of the share option plan have been fulfilled, 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, 2007 and 2006, respectively, as the required conversion criteria were fulfilled 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

	2007	Year ending Dec. 31 2006

Net income attributable to shareholders (€ in millions)	551	483
Weighted average number of shares	203,594,975	203,386,104
Basic earnings per share (in €)	2.71	2.37
Net income attributable to shareholders (€ in millions)	551	483
Interest expense on convertible bond, net of taxes (€ in millions)	12	12
Net income used to determine diluted earnings per share (€ in millions)	563	495
Weighted average number of shares	203,594,975	203,386,104
Weighted share options	187,887	328,308
Weighted assumed conversion convertible bond	15,684,315	15,685,110
Weighted average number of shares for diluted earnings per share	219,467,177	219,399,522
Diluted earnings per share (in €)	2.57	2.25