Consolidated statements of income

Consolidated statements of income (including earnings per share) of the Philips Group for the years ended December 31
	2007	2008	2009

Sales	26,793	26,385	23,189
Cost of sales	(17,603)	(17,938)	(15,110)

Gross margin	9,190	8,447	8,079

Selling expenses	(4,993)	(5,518)	(5,159)
General and administrative expenses	(833)	(972)	(734)
Research and development expenses	(1,601)	(1,777)	(1,631)
Impairment of goodwill	−	(301)	−
Other business income	269	261	97
Other business expenses	(165)	(86)	(38)

Income from operations	1,867	54	614

Financial income	3,194	1,594	225
Financial expenses	(345)	(1,506)	(391)

Income before taxes	4,716	142	448

Income tax expense	(582)	(256)	(100)

Income (loss) after taxes	4,134	(114)	348

Results relating to equity-accounted investees:
- Company’s participation in income	246	81	23
- Other results	638	(62)	53

Income (loss) from continuing operations	5,018	(95)	424

Discontinued operations - net of income tax	(138)	3	−

Net income (loss)	4,880	(92)	424

Attribution of net income (loss)
Net income (loss) attributable to stockholders	4,873	(91)	410
Net income (loss) attributable to minority interests	7	(1)	14

The accompanying notes are an integral part of these consolidated ﬁnancial statements.

Earnings per share
		2007		2008		2009

Weighted average number of common shares outstanding (after deduction of treasury stock) during the year		1,086,128,418		991,420,017		925,481,395
Plus incremental shares from assumed conversions of:
Options and restricted share rights	11,669,275		5,191,635		3,555,559
Convertible debentures	1,127,690		102,249		−
Dilutive potential common shares		12,796,965		5,293,884		3,555,559
Adjusted weighted average number of shares (after deduction of treasury stock) during the year		1,098,925,383		996,713,901		929,036,954

Basic earnings per common share in euros
Income (loss) from continuing operations		4.61		(0.09)		0.46
Loss from discontinued operations		(0.12)		−		−
Net income (loss)		4.49		(0.09)		0.46
Net income (loss) attributable to stockholders		4.49		(0.09)		0.44

Diluted earnings per common share in euros
Income (loss) from continuing operations		4.56		(0.09)¹⁾		0.46
Loss from discontinued operations		(0.13)		−¹⁾		−
Net income (loss)		4.43		(0.09)¹⁾		0.46
Net income (loss) attributable to stockholders		4.43		(0.09)¹⁾		0.44

Dividend paid per common share in euros		0.60		0.70		0.70

In 2009, 2008 and 2007, respectively 52 million, 48 million and 27 million securities that could potentially dilute basic EPS were not included in the computation of dilutive EPS because the effect would have been antidilutive for the periods presented.
¹⁾	In 2008, the incremental shares from assumed conversion are not taken into account as the effect would be antidilutive.