• Next : 6 Employee information
• Previous : 4 Taxation
• Back : Notes to the financial statements

Basic earnings per ordinary share (EPS) are calculated by dividing the profit attributable to ordinary shareholders by weighted average number of ordinary shares in issue during the year, excluding ordinary shares held under trust, which have been treated as if they had been cancelled.

Diluted EPS are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year as above, adjusted by the bonus element of share options.

	2008 2007
	Basic	Potentially dilutive share options	Diluted	Basic	Potentially dilutive share options	Diluted
(Loss)/profit (£m)	(1,340)	—	(1,340)	606	—	606
Weighted average number of shares (millions)	1,820	—1	1,820	1,800	38	1,838
EPS (pence)	(73.63)	—	(73.63)	33.67	(0.70)	32.97

¹As the basic EPS is negative, in accordance with IAS 33 Earnings per Share, share options are not considered dilutive.

Underlying² EPS has been calculated as follows:

	2008 2007
	Pence	£m	Pence	£m
EPS/(Loss)/profit attributable to equity holders of the parent	(73.63)	(1,340)	33.67	606
Release of transition hedging reserve	(4.40)	(80)	(8.28)	(149)
Realised gains on settled derivative contracts	16.05	292	23.33	420
Net unrealised fair value changes to derivative contracts	135.99	2,475	(13.94)	(251)
Effect of currency on contract accounting	(2.42)	(44)	(4.22)	(76)
Revaluation of trading assets and liabilities	(0.77)	(14)	0.56	10
Financial RRSPs – foreign exchange differences and changes in forecast payments	6.65	121	0.72	13
Net post-retirement scheme financing	1.21	22	(1.67)	(30)
Post-retirement schemes – past service costs ( note 18)	—	—	7.22	130
Related tax effect	(41.98)	(764)	(1.39)	(25)
Change in rates of corporation tax ( note 4)	—	—	(1.94)	(35)
Underlying EPS/Underlying profit attributable to equity holders of the parent	36.70	668	34.06	613

²See note 2.