Notes to the consolidated accounts

5 Net finance costs

	€ million	€ million	€ million
Finance costs	2007	2006	2005
Finance costs	(550)	(590)	(689)
Bank loans and overdrafts	(62)	(93)	(90)
Bonds and other loans	(493)	(499)	(569)
Dividends paid on preference shares	(7)	(6)	(11)
Net gain/(loss) on derivatives designated as a fair value hedge for which no hedge accounting is applied:	12	8	(19)
On interest rate swaps	(1)	(6)	(11)
On foreign exchange derivatives	538	1 035	(798)
Exchange difference on underlying items	(525)	(1 021)	790
Preference shares provision(a)	(7)	(300)	–
Finance income	147	128	129
Pensions and similar obligations(b)	158	41	(53)
	(252)	(721)	(613)

(a) For further information please refer to note 19.
(b) Net finance costs in respect of pensions and similar obligations are analysed in note 20.