Tesco 2008 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2008 Tesco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

Tesco PLC Annual Report and
Financial Statements 2008
62 www.tesco.com/annualreport08
Note 9 Earnings per share and diluted earnings per share
Basic earnings per share amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number
of ordinary shares in issue during the year.
Diluted earnings per share amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average number
of ordinary shares in issue during the year (adjusted for the effects of potentially dilutive options).
The dilution effect is calculated on the full exercise of all ordinary share options granted by the Group, including performance-based options which
the Group considers to have been earned.
2008 2007
Potentially Potentially
dilutive dilutive
Basic share options Diluted Basic share options Diluted
Profit (£m)
Continuing operations 2,124 – 2,124 1,874 – 1,874
Discontinued operation –––18 – 18
To t a l 2,124 – 2,124 1,892 – 1,892
Weighted average number of shares (million) 7,881 102 7,983 7,936 102 8,038
Earnings per share (pence)
Continuing operations 26.95 (0.34) 26.61 23.61 (0.30) 23.31
Discontinued operation –––0.23 – 0.23
To t a l 26.95 (0.34) 26.61 23.84 (0.30) 23.54
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
2008 2007
£m pence/share £m pence/share
Profit
Earnings from continuing operations 2,124 26.61 1,874 23.31
Adjustments for:
IAS 32 and IAS 39 ‘Financial Instruments’ – Fair value remeasurements (49) (0.61) 4 0.05
Total IAS 19 Income Statement charge for pensions 414 5.19 432 5.37
‘Normal’ cash contributions for pensions (340) (4.26) (321) (3.99)
Pensions adjustment – Finance Act 2006 ––(258) (3.21)
IAS 17 ‘Leases’ – impact of annual uplifts in rent and rent-free periods 18 0.22 ––
Impairment of the Gerrards Cross site ––35 0.44
Tax effect of adjustments at the effective rate of tax (2008 – 24.0%*; 2007 – 29.1%) (10) (0.13) 31 0.39
Underlying earnings from continuing operations* 2,157 27.02 1,797 22.36
* Removing the one-off impact of settling prior year tax items with HMRC, underlying diluted earnings per share was 25.28p and grew by 13.1% on a normalised tax rate of 28.9%.
Notes to the Group financial statements continued