# 11 Earnings per share

Basic earnings per share are calculated by dividing profit attributable to shareholders of Volkswagen AG by the weighted average number of ordinary and preferred shares outstanding during the reporting period. IAS 33.23 sets out that all potential shares that will be issued upon the conversion of a mandatory convertible note must be accounted for as issued shares and included in the calculation of basic and diluted earnings per share. The number of outstanding preferred shares is therefore increased by the potential preferred shares that would be issued if the mandatory convertible note issued in November were actually to be converted. The average number of new preferred shares to be included is based on the maximum conversion ratio resulting from the minimum conversion price of €154.50. The finance costs associated with the mandatory convertible note are not included in the calculation of consolidated profit because the interest component was recognized in other comprehensive income when the note was issued, and interest expense arises only from the amount of compound interest. Since the number of basic and diluted shares is identical, basic earnings per share also correspond to diluted earnings per share.

See note 24 for further information regarding the issuance of the mandatory convertible note.

 Ordinary Preferred Quantity 2012 295,089,818 295,068,426 172,480,067 170,142,778 0 7,508 0 0 295,089,818 295,075,934 172,480,067 170,142,778
 € million 2012 21,884 15,799 168 391 21,717 15,409 13,699 9,767 13,699 9,767 8,017 5,642 8,017 5,642
 € 2012 46.42 33.10 46.42 33.10 46.48 33.16 46.48 33.16
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