performance. Medicaid rebates are generally settled around 150 days from the transaction date.

Other US and non-US discounts and sales returns

Other discounts are provided to distributors, wholesalers, hospitals, pharmacies, etc. They are usually linked to sales volume or provided as cash discounts. Discounts are calculated based on historical data and recorded as a reduction in gross sales at the time the related sales are recorded. Sales returns relate to damaged or expired products.

Other net sales disclosures

In 2022, Novo Nordisk had three major wholesalers distributing products in the US, representing 19%, 14% and 13% respectively of global net sales (18%, 13% and 13% in 2021 and 19%, 13% and 12% in 2020). Sales to these three wholesalers are within both Diabetes and Obesity care and Rare disease.

Net sales to be recognised from fulfilling existing customer contracts containing fixed or minimum sales volumes, with an original term greater than 12 months, are expected to be DKK 1,835 million within 12 months (DKK 1,012 million in 2021) and DKK 798 million thereafter (DKK 962 million
in 2021).

Novo Nordisk's sales are impacted by exchange rate changes. Refer to
note 4.3 for development in key exchange rates.

Accounting policies

Revenue from sale of goods is recognised when Novo Nordisk has transferred control of products sold to the buyer and it is probable that Novo Nordisk will collect the consideration to which it is entitled for transferring the products. Control of the products is transferred at a single point in time, typically on delivery. The amount of sales to be recognised is based on the consideration Novo Nordisk expects to receive in exchange for its goods. When sales are recognised, Novo Nordisk also records estimates for a variety of sales deductions; including product returns as well as rebates and discounts to government agencies, wholesalers, health insurance companies, managed healthcare organisations and retail customers. Sales deductions are recognised as a reduction of gross sales to arrive at net sales, by assessing the expected value of the sales deductions (variable consideration). Where contracts contain customer acceptance criteria, Novo Nordisk recognises sales when the acceptance criteria are satisfied.

In some markets, Novo Nordisk sells products on a sale-or-return basis.

Where there is historical experience or a reasonably accurate estimate of future returns, estimated product returns are recorded as a reduction in sales. Where shipments of new products are made on a sale-or-return basis, without sufficient historical experience for estimating sales returns, revenue

is recorded based on estimated demand and acceptance rates for well-established products with similar market characteristics. If similar market characteristics do not exist, revenue is recorded when there is evidence
of consumption or when the right of return has expired.

Unsettled rebates are recognised as provisions when the timing or
amount is uncertain (note 3.5).

Where absolute amounts are known, the rebates are recognised as
other liabilities. Wholesaler charge-backs that are absolute are netted against trade receivable balances.

The impact of foreign currency hedging is recognised in the income statement in financial items. Please refer to notes 4.3, 4.4 and 4.10 for
more details on hedging.

Key accounting estimates of sales deductions and provisions
for sales rebates

Sales deductions are estimated and provided for at the time the related sales are recorded. These estimates of unsettled rebate, discount and product return obligations require use of significant judgement, as not all conditions are known at the time of sale, for example total sales volume
to a given customer. The estimates are based on analyses of existing contractual obligations and historical experience. Provisions are calculated on the basis of a percentage of sales for each product as defined by the contracts with the various customer groups. Provisions for sales rebates are adjusted to actual amounts as rebates, discounts and returns are processed.

Revenue related to 340B drug pricing program can only be recognised to the extent that it is highly probable that a significant reversal of the recognised revenue will not occur. Determining the amount of revenue to recognise requires significant estimation. Management has considered interpretations of applicable laws, whether the consideration is highly susceptible to factors outside Novo Nordisk's influence, as well as the historical claims experience. Please refer to note 3.5 Provisions and contingent liabilities for information on the ongoing litigation related to the 340B Drug Pricing Program.

Novo Nordisk considers the provisions established for sales rebates to
be reasonable and appropriate based on currently available information. However, the actual amount of rebates and discounts may differ from
the amounts estimated by Management as more detailed information becomes available.

2.2 Segment information


Business segments – Key figures
	Diabetes and Obesity care						Rare disease						Total
DKK million	2022		2021		2020		2022		2021		2020		2022		2021		2020
Total net sales	156,412		121,597		108,020		20,542		19,203		18,926		176,954		140,800		126,946
Cost of goods sold	(23,405)		(19,363)		(17,715)		(5,043)		(4,295)		(3,217)		(28,448)		(23,658)		(20,932)
Sales and distribution costs	(42,392)		(33,791)		(29,903)		(3,825)		(3,217)		(3,025)		(46,217)		(37,008)		(32,928)
Research and development costs	(20,157)		(15,600)		(13,535)		(3,890)		(2,172)		(1,927)		(24,047)		(17,772)		(15,462)
Administrative costs	(3,955)		(3,504)		(3,387)		(512)		(546)		(571)		(4,467)		(4,050)		(3,958)
Other operating income and expenses	892		199		264		142		133		196		1,034		332		460
Segment operating profit	67,395		49,538		43,744		7,414		9,106		10,382		74,809		58,644		54,126
Operating margin	43.1	%	40.7	%	40.5	%	36.1	%	47.4	%	54.9	%	42.3	%	41.7	%	42.6	%
Depreciation, amortisation and impairment losses expensed	(5,701)		(4,895)		(4,624)		(1,661)		(1,130)		(1,129)		(7,362)		(6,025)		(5,753)

Novo Nordisk operates in two business segments based on therapies: Diabetes and Obesity care and Rare disease (formerly known as Biopharm), representing the entirety of the Group's operations. The activities of the segments include research, development, manufacturing and marketing of products within the following areas:

– Diabetes and Obesity care: diabetes, obesity and other
serious chronic diseases

– Rare disease: rare blood disorders, rare endocrine disorders and
hormone replacement therapy.

Segment performance is evaluated on the basis of operating profit, consistent with the consolidated financial statements. Financial income and expenses and income taxes are managed at Group level and are not allocated to business segments. There are no sales or other transactions between the business segments. Costs have generally been split between business segments according to a specific allocation. Certain corporate overhead costs are allocated between segments based on overall allocation keys. Other operating income and expenses have been allocated to the two segments based on the same principle.

Accounting policies

Operating segments are reported in a manner consistent with the internal reporting provided to Executive Management and the Board of Directors. We consider Executive Management to be the operating decision-making

body.

Geographical areas

In 2022, Novo Nordisk operated in two main commercial units:

– International Operations

– EMEA: Europe, the Middle East and Africa.

– China: Mainland China, Hong Kong and Taiwan.

– Rest of World: All other countries except for North America.

– North America Operations (the US and Canada).

In 2022, the US contributed with 10% or more of total net sales. In 2021 and 2020 Mainland China also contributed with 10% or more of total net sales. The country of domicile is Denmark, which is part of EMEA. Denmark is immaterial to Novo Nordisk's activities in terms of sales as 99.8% of total sales are realised outside Denmark. Sales are attributed to geographical areas according to the location of the customer.

Out of total property, plant and equipment and intangible assets of DKK 118,087 million (DKK 98,533 million in 2021), DKK 54,492 million is located in Denmark (DKK 46,705 million in 2021) and DKK 44,744 million is located in the US (DKK 41,035 million in 2021) where the majority of production facilities and intangible assets are located. Refer to note 5.7 for an overview of companies in the Novo Nordisk Group based on geographical areas.


Net sales – Business segments and geographical areas
	Total International Operations																								Total North America Operations												Total Novo Nordisk net sales
	Total IO						EMEA						China						Rest of World						Total NAO						Of which the US
DKK million	2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020
Diabetes and Obesity care segment:
Rybelsus®	3,155		524		36		1,714		289		36		63		—		—		1,378		235		—		8,144		4,314		1,837		8,011		4,243		1,826		11,299		4,838		1,873
Ozempic®	17,369		8,856		3,634		10,417		6,393		3,112		2,196		303		10		4,756		2,160		512		42,381		24,849		17,577		38,750		23,168		16,650		59,750		33,705		21,211
Victoza®	5,672		6,726		7,095		2,724		3,527		4,251		1,478		1,544		1,033		1,470		1,655		1,811		6,650		8,328		11,652		6,406		8,031		11,292		12,322		15,054		18,747
Total GLP-1	26,196		16,106		10,765		14,855		10,209		7,399		3,737		1,847		1,043		7,604		4,050		2,323		57,175		37,491		31,066		53,167		35,442		29,768		83,371		53,597		41,831
Long-acting insulin	11,403		11,074		9,959		7,157		6,729		6,451		1,636		2,080		1,471		2,610		2,265		2,037		5,338		6,990		8,480		4,685		6,412		7,962		16,741		18,064		18,439
– of which Tresiba®	6,092		5,486		4,407		3,485		2,979		2,574		1,050		1,095		418		1,557		1,412		1,415		3,261		4,243		4,561		2,723		3,793		4,191		9,353		9,729		8,968
– of which Xultophy®	2,400		2,135		1,789		1,716		1,693		1,605		45		3		1		639		439		183		409		522		655		399		512		642		2,809		2,657		2,444
– of which Levemir®	2,911		3,453		3,763		1,956		2,057		2,272		541		982		1,052		414		414		439		1,668		2,225		3,264		1,563		2,107		3,129		4,579		5,678		7,027
Premix insulin	10,023		10,512		10,246		2,622		2,879		2,959		4,912		5,224		4,852		2,489		2,409		2,435		539		691		679		517		665		652		10,562		11,203		10,925
– of which Ryzodeg®	2,889		1,711		1,291		495		392		321		1,218		283		39		1,176		1,036		931		—		—		—		—		—		—		2,889		1,711		1,291
– of which NovoMix®	7,134		8,801		8,955		2,127		2,487		2,638		3,694		4,941		4,813		1,313		1,373		1,504		539		691		679		517		665		652		7,673		9,492		9,634
Fast-acting insulin	10,826		10,903		10,808		6,456		6,454		6,584		1,942		2,288		2,075		2,428		2,161		2,149		6,637		6,784		7,505		6,247		6,357		7,101		17,463		17,687		18,313
– of which Fiasp®	1,354		1,106		832		1,138		965		764		—		—		—		216		141		68		649		642		553		606		605		519		2,003		1,748		1,385
– of which NovoRapid®	9,472		9,797		9,976		5,318		5,489		5,820		1,942		2,288		2,075		2,212		2,020		2,081		5,988		6,142		6,952		5,641		5,752		6,582		15,460		15,939		16,928
Human insulin	6,508		7,453		7,339		1,983		2,152		2,370		1,812		2,692		2,655		2,713		2,609		2,314		1,678		1,599		1,534		1,605		1,515		1,431		8,186		9,052		8,873
Total insulin	38,760		39,942		38,352		18,218		18,214		18,364		10,302		12,284		11,053		10,240		9,444		8,935		14,192		16,064		18,198		13,054		14,949		17,146		52,952		56,006		56,550
Other Diabetes care	2,428		2,644		2,946		717		713		725		1,181		1,432		1,546		530		499		675		797		950		1,085		660		806		943		3,225		3,594		4,031
Total Diabetes care	67,384		58,692		52,063		33,790		29,136		26,488		15,220		15,563		13,642		18,374		13,993		11,933		72,164		54,505		50,349		66,881		51,197		47,857		139,548		113,197		102,412
Wegovy®	54		—		—		54		—		—		—		—		—		—		—		—		6,134		1,386		—		6,134		1,386		—		6,188		1,386		—
Saxenda®	5,832		3,117		2,118		3,561		1,809		1,124		133		61		10		2,138		1,247		984		4,844		3,897		3,490		4,368		3,526		3,230		10,676		7,014		5,608
Total Obesity care	5,886		3,117		2,118		3,615		1,809		1,124		133		61		10		2,138		1,247		984		10,978		5,283		3,490		10,502		4,912		3,230		16,864		8,400		5,608
Diabetes and Obesity care total	73,270		61,809		54,181		37,405		30,945		27,612		15,353		15,624		13,652		20,512		15,240		12,917		83,142		59,788		53,839		77,383		56,109		51,087		156,412		121,597		108,020
Rare disease segment:
Rare blood disorders	6,671		5,784		5,708		3,795		3,712		3,579		604		222		361		2,272		1,850		1,768		5,035		4,433		3,954		4,710		4,170		3,675		11,706		10,217		9,662
– of which Haemophilia A	1,769		1,625		1,332		1,137		1,162		983		81		24		16		551		439		333		569		487		381		543		460		358		2,338		2,112		1,713
– of which Haemophilia B	479		400		306		294		268		199		13		4		—		172		128		107		280		237		212		152		102		86		759		637		518
– of which NovoSeven®	4,335		3,673		3,996		2,311		2,225		2,352		510		194		345		1,514		1,254		1,299		3,973		3,548		3,207		3,811		3,461		3,089		8,308		7,221		7,203
Rare endocrine disorders	4,904		4,880		4,832		2,232		2,212		2,220		246		167		66		2,426		2,501		2,546		2,234		2,423		2,875		2,205		2,400		2,857		7,138		7,303		7,707
Other Rare disease	1,002		1,064		1,108		804		837		886		6		6		5		192		221		217		696		619		449		358		330		205		1,698		1,683		1,557
Rare disease total	12,577		11,728		11,648		6,831		6,761		6,685		856		395		432		4,890		4,572		4,531		7,965		7,475		7,278		7,273		6,900		6,737		20,542		19,203		18,926
Total sales by geographical area	85,847		73,537		65,829		44,236		37,706		34,297		16,209		16,019		14,084		25,402		19,812		17,448		91,107		67,263		61,117		84,656		63,009		57,824		176,954		140,800		126,946
Total sales growth as reported	16.7	%	11.7	%	6.9	%	17.3	%	9.9	%	6.5	%	1.2	%	13.7	%	9.7	%	28.2	%	13.5	%	5.7	%	35.4	%	10.1	%	1.1	%	34.4	%	9.0	%	0.6	%	25.7	%	10.9	%	4.0	%

2.3 Research and development costs


DKK million	2022		2021		2020
Employee costs (note 2.4)	9,952		7,328		6,269
Amortisation and impairment losses, intangible assets (note 3.1)	1,364		744		1,025
Depreciation and impairment losses, property, plant and equipment (note 3.2)	922		736		724
Other research and development costs	11,809		8,964		7,444
Total research and development costs	24,047		17,772		15,462
As percentage of net sales	13.6	%	12.6	%	12.2	%

Novo Nordisk's research and development is mainly focused on:

– insulins, GLP-1s and other therapeutic compounds for diabetes treatment

– GLP-1s, combinations and new modes of action for Obesity care

– blood-clotting factors and new modes of action for treatment of haemophilia and other rare blood disorders

– human growth hormone and new modes of action for treatment of growth disorders and other rare endocrine disorders

– new indications with existing assets within NASH, Alzheimer’s and chronic kidney disease

– Research technology platforms including cell therapy and RNAi for treatment of NASH, cardiovascular disease, chronic kidney disease and Parkinson's disease, among others

The research activities mainly utilise biotechnological methods based on advanced protein chemistry and protein engineering. These methods have played a key role in the development of the production technology used to manufacture insulin, GLP-1, recombinant blood-clotting factors and human growth hormone. Research activities further utilise new technology platforms including stem cells, gene therapy and RNAi therapies.

Research and development activities are carried out by Novo Nordisk's research and development centres, mainly in Denmark, the US, the UK and China. Clinical trials are carried out all over the world. Novo Nordisk also enters into partnerships and licence agreements.

Accounting policies

Novo Nordisk expenses all research costs. In line with industry practice, internal and subcontracted development costs are also expensed as
they are incurred, due to significant regulatory uncertainties and other uncertainties inherent in the development of new products. This means
that they do not qualify for capitalisation as intangible assets until marketing approval by a regulatory authority is obtained or considered highly probable. Costs for post-approval activities that are required by authorities as a condition for obtaining regulatory approval are recognised as research and development costs.

Research and development costs primarily comprise employee costs as well as internal and external costs related to execution of studies, including

manufacturing costs and facility costs of the research centres. The costs
also comprise amortisation, depreciation and impairment losses related
to intellectual property rights and property, plant and equipment used in the research and development activities. Amortisations of intellectual property rights related to marketed products are recognised in cost of goods sold.

The largest individual type of cost included in Other research and development costs are clinical trial cost.

Certain research and development activities are recognised outside research and development costs:

– Royalty expenses paid to partners after regulatory approval are expensed as cost of goods sold

– Royalty income received from partners is recognised as part of other operating income and expenses

– Contractual research and development obligations to be paid in the future are disclosed separately as commitments in note 5.2.

2.4 Employee costs


DKK million	2022	2021	2020
Wages and salaries	34,575	28,939	26,778
Share-based payment costs (note 5.1)	1,539	1,040	823
Pensions – defined contribution plans	2,472	2,022	1,961
Pensions – defined benefit plans	185	139	138
Other social security contributions	2,713	2,203	1,862
Other employee costs	3,105	2,189	2,044
Total employee costs for the year	44,589	36,532	33,606
Employee costs capitalised as intangible assets and property, plant and equipment	(1,451)	(1,240)	(1,279)
Change in employee costs capitalised as inventories	(70)	(56)	(60)
Total employee costs in the income statement	43,068	35,236	32,267
Included in the income statement:
Cost of goods sold	11,766	9,611	8,896
Sales and distribution costs	17,700	15,003	14,146
Research and development costs	9,952	7,328	6,269
Administrative costs	3,517	3,098	2,848
Other operating income and expenses	133	196	108
Total employee costs in the income statement	43,068	35,236	32,267


Number of employees	2022	2021	2020
Average number of full-time employees	51,046	46,171	43,759
Year-end number of full-time employees	54,393	47,792	44,723
Year-end employees (total)	55,185	48,478	45,323


Remuneration to Executive Management and Board of Directors
DKK million	2022	2021	2020
Salary and short-term incentive	141	126	119
Pension	13	12	26
Benefits	9	10	10
Long-term incentive1	97	100	52
Severance payments	—	29	—
Executive Management in total2	260	277	207
Fee to Board of Directors3	20	17	17
Total	280	294	224
1. Please refer to note 5.1 for further information. 2. Total remuneration for registered members of Executive Management amounts to DKK 175 million (DKK 202 million in 2021 and DKK 141 million in 2020). 3. All members of the Board of Directors are registered.

Wages, salaries, social security contributions, annual leave and sick leave, bonuses and non-monetary benefits are recognised in the year in which
the associated services are rendered by employees of Novo Nordisk. Where Novo Nordisk provides long-term employee benefits, the costs are accrued to match the rendering of the services by the employees concerned.

2.5 Other operating income and expenses

Accounting policies

Other operating income and expenses, comprises licence income and other income of a secondary nature in relation to the main activities of Novo Nordisk. Licence income from royalties on net sales is recognised as the underlying customers' sale occurs and from sales milestones once the contingent sale milestone is achieved in accordance with the terms of the relevant agreement.

Operating profit from the wholly owned subsidiary NNE A/S, not related
to Novo Nordisk's main activities, is recognised as other operating income and expenses. Other operating income and expenses, also includes income from the sale of intellectual property rights as well as costs associated with secondary income and transaction costs incurred in connection with acquisition of businesses.

2.6 Income taxes and deferred income taxes


Income taxes expensed
DKK million	2022	2021	2020
Current tax on profit for the year	17,829	13,871	11,557
Deferred tax on profit for the year	(3,806)	(1,528)	1,105
Tax on profit for the year	14,023	12,343	12,662
Current tax adjustments recognised for prior years	339	(603)	(563)
Deferred tax adjustments recognised for prior years	(825)	(417)	(1,107)
Income taxes in the income statement	13,537	11,323	10,992
Tax on other comprehensive income for the year, (income)/expense	889	(1,005)	577


Computation of effective tax rate
DKK million	2022		2021		2020
Statutory corporate income tax rate in Denmark	22.0	%	22.0	%	22.0	%
Deviation in foreign subsidiaries' tax rates compared to the Danish tax rate (net)	(1.1	%)	(1.5	%)	(2.5	%)
Non-taxable income less non-tax-deductible expenses (net)	(0.5	%)	(0.3	%)	(0.2	%)
Other adjustments (net)	(0.8	%)	(1.0	%)	1.4	%
Effective tax rate	19.6	%	19.2	%	20.7	%


Income taxes paid
DKK million	2022	2021	2020
Income taxes paid in Denmark for current year	9,181	9,703	4,262
Income taxes paid outside Denmark for current year	5,647	3,439	4,508
Income taxes paid/(repayments) relating to prior years	(313)	1,296	1,336
Income taxes paid	14,515	14,438	10,106

The deviation in foreign subsidiaries' tax rates from the Danish tax rate is mainly driven by Swiss and US business activities. Other adjustments consist of tax related to acquisitions and adjustments to prior years.

In 2020, income taxes paid in Denmark and paid outside Denmark were impacted by transfers of intellectual property rights related to acquisitions. In 2022, paid taxes related to prior years are impacted by a refund of overpaid tax from 2021.

Accounting policies

The tax expense for the period comprises current and deferred tax. It also includes adjustments to previous years and changes in provisions for uncertain tax positions. Tax is recognised in the income statement except to the extent that it relates to items recognised in equity or other comprehensive income. Provisions for ongoing tax disputes are included as part of deferred tax assets, tax receivables and tax payables.

Deferred income taxes arise from temporary differences between the accounting and tax values of the individual consolidated companies and from realisable tax loss carry-forwards. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. The tax value of tax loss carry-forwards is included in deferred tax assets to the extent that these are expected to be utilised in future taxable income. The deferred income taxes are measured according to current tax rules and at the tax rates assumed in the year in which the assets are expected to be utilised.

In general, the Danish tax rules related to dividends from group companies provide exemption from tax for most repatriated profits. In some countries withholding tax will be applied to dividends paid to Denmark. A provision for withholding tax is only recognised if a concrete distribution of dividends is planned. The unrecognised potential withholding tax amounts to DKK 567 million (DKK 444 million in 2021).

The value of future tax deductions in relation to share programmes is recognised as a deferred tax asset until the shares are paid out to the employees. Any estimated excess tax deduction compared to the costs realised in the income statement is charged to equity.

Key accounting estimate regarding deferred income tax assets and provisions for uncertain tax positions

Management has considered future taxable income and has estimated
the amount of deferred income tax assets that should be recognised. The estimate is based on an assessment of whether sufficient taxable income will be available in the future, against which the temporary differences and unused tax losses can be utilised. The total tax value of unrecognised tax loss carry-forwards amounts to DKK 456 million in 2022 (DKK 166 million
in 2021).


Development in deferred income tax assets and liabilities
DKK million	Property, plant and equipment	Intangible assets	Inventories	Liabilities	Other	Offset within countries	Total
2022
Net deferred tax asset/(liability) at 1 January	(1,980)	(7,375)	3,195	6,932	2,629	—	3,401
Income/(charge) to the income statement	(413)	674	(465)	3,999	836		4,631
Income/(charge) to other comprehensive income	—	—	(130)	(141)	(608)		(879)
Income/(charge) to equity	—	—	—	—	234		234
Additions from acquisitions (5.3)	—	(1,475)	—	—	242		(1,233)
Effect of exchange rate adjustment	(9)	(103)	(5)	217	112		212
Net deferred tax asset/(liability) at 31 December	(2,402)	(8,279)	2,595	11,007	3,445	—	6,366
Classified as follows:
Deferred tax asset at 31 December	579	195	2,627	11,027	4,169	(5,170)	13,427
Deferred tax liability at 31 December	(2,981)	(8,474)	(32)	(20)	(724)	5,170	(7,061)
2021
Net deferred tax asset/(liability) at 1 January	(1,614)	(3,600)	2,556	4,617	1,404	—	3,363
Income/(charge) to the income statement	(330)	632	387	2,037	(781)		1,945
Income/(charge) to other comprehensive income	—	2	251	(41)	793		1,005
Income/(charge) to equity	—	(2)	—	—	194		192
Additions from acquisitions (5.3)	—	(4,456)	—	—	976		(3,480)
Effect of exchange rate adjustment	(36)	49	1	319	43		376
Net deferred tax asset/(liability) at 31 December	(1,980)	(7,375)	3,195	6,932	2,629	—	3,401
Classified as follows:
Deferred tax asset at 31 December	719	109	3,210	7,223	3,541	(6,130)	8,672
Deferred tax liability at 31 December	(2,699)	(7,484)	(15)	(291)	(912)	6,130	(5,271)

In the course of conducting business globally, tax and transfer pricing disputes with tax authorities may occur. Management has estimated the expected outcome of the disputes by using the ‘most probable outcome’-method to determine the provisions for uncertain tax positions. Management considers the provisions made to be adequate. However,
the actual obligation may deviate and depends on the result of litigation
and settlements with the relevant tax authorities.

2.7 Earnings per share



		2022	2021	2020
Net profit		55,525	47,757	42,138
Average number of shares outstanding1	in million shares	2,265.3	2,296.6	2,333.9
Dilutive effect of average outstanding share pool2	in million shares	7.0	6.5	6.1
Average number of shares outstanding, including dilutive effect of outstanding share pool	in million shares	2,272.3	2,303.1	2,340.0
Basic earnings per share	DKK	24.51	20.79	18.05
Diluted earnings per share	DKK	24.44	20.74	18.01
1. For further information on the development in treasury shares, please refer to note 4.2 2. For further information on the outstanding share pool, please refer to note 5.1.

Accounting policies

Earnings per share is presented as both basic and diluted earnings per share. Basic earnings per share is calculated as net profit divided by the monthly average number of shares outstanding. Diluted earnings per share is calculated as net profit divided by the sum of monthly average number of shares outstanding, including the dilutive effect of the outstanding share pool. Please refer to 'Financial definitions' for a description of calculation of the dilutive effect.