16. Earnings per share from continuing and discontinued operations

Earnings per share are determined according to IAS 33 (Earnings per Share) by dividing net income by the weighted average number of shares. The number of ordinary shares to be taken into account for this purpose is increased by the potential shares that would be issued upon exercise of the rights under the mandatory convertible bond issued in April 2006. The financing expenses for the mandatory convertible bond are added back to net income. In computing earnings per share, the ordinary shares to be issued upon exercise of the conversion rights from this bond issue are counted along with the already issued shares, so basic and diluted earnings per share are identical. Further details of the convertible bond can be found in Note [27] .

	2006	2007
€ million
Income after taxes	1,695	4,716
Income attributable to minority interest	12	5
Income attributable to Bayer AG stockholders	1,683	4,711
Income from discontinued operations	169	2,410

Financing expenses for the mandatory convertible bond, net of tax effects	72	98
Adjusted income from continuing operations after taxes	1,586	2,399
Adjusted net income	1,755	4,809

Weighted average number of issued ordinary shares	746,456,988	764,341,920
Potential shares to be issued upon conversion of the mandatory convertible bond	45,300,595	59,565,383
Adjusted weighted average total number of issued and potential ordinary shares	791,757,583	823,907,303

Basic earnings per share (€)
from continuing operations	2.00	2.91
from discontinued operations	0.22	2.93
from continuing and discontinued operations	2.22	5.84
Diluted earnings per share (€)
from continuing operations	2.00	2.91
from discontinued operations	0.22	2.93
from continuing and discontinued operations	2.22	5.84

Under the German Stock Corporation Act, the sum available for payment of the dividend is determined from the balance sheet profit shown in the annual financial statements for Bayer AG prepared in accordance with the German Commercial Code.

The dividend paid for the 2006 fiscal year was €1.00 per share, compared with €0.95 for 2005. The proposed dividend for fiscal 2007 is €1.35 per share. Payment of the proposed dividend is contingent upon approval by the stockholders at the Annual Stockholders’ Meeting and has not been recognized as a liability in the consolidated financial statements of the Bayer Group.

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