British Sky Broadcasting Group plc (BSkyB) operates the leading pay television broadcast service in the United Kingdom and Ireland. Shares of the company trade on the London Stock Exchange and the NYSE. The company produces financial statements in accordance with IFRS.
Access the company's annual report for the year ended June 30, 2009, from its website (http://corporate.sky.com). We know from the annual report (page 63) that the company's shares traded between £3.29 and £5.03 per share.
(a) Determine how the company has calculated the basic and diluted earnings per share and verify the calculations, where possible. That is, verify (by examining the relevant notes) the number of shares outstanding, adjustments made to the ordinary shares, and the dilutive shares added.
Note any information that is missing in order for you to make this determination. What amounts were determined to be antidilutive? Using the share prices disclosed in the question, determine why the company has concluded that there are some items that are antidilutive.
(b) Assume that all conditions have been met for share option awards. Determine the amount of shares that would be added for the dilution using the treasury stock method for 2009. (Make note of any assumptions you have made.)
(c) BSkyB has also disclosed other information on a per share basis. Explain this other per share data. Why has the company provided this information? If you were an investor, would you find it useful?