Notes to the consolidated accounts
28 Reconciliation of net profit to cash flow from operating activities
| € million | € million | € million | |
|---|---|---|---|
| Cash flow from operating activities | 2007 | 2006 | 2005 |
| Net profit | 4 136 | 5 015 | 3 975 |
| Taxation | 1 137 | 1 332 | 1 301 |
| Share of net profit of joint ventures/associates and other income from non-current investments | (191) | (144) | (55) |
| Net finance costs: | 252 | 725 | 618 |
| Finance income | (147) | (138) | (130) |
| Finance cost | 550 | 602 | 693 |
| Preference shares provision | 7 | 300 | – |
| Pensions and similar obligations | (158) | (39) | 55 |
| Operating profit (continuing and discontinued operations) | 5 334 | 6 928 | 5 839 |
| Depreciation, amortisation and impairment | 943 | 982 | 1 274 |
| Changes in working capital: | 27 | 87 | 193 |
| Inventories | (333) | (156) | (153) |
| Trade and other current receivables | (43) | (172) | (36) |
| Trade payables and other current liabilities | 403 | 415 | 382 |
| Pensions and similar provisions less payments | (910) | (1 038) | (532) |
| Provisions less payments | 145 | 107 | (230) |
| Elimination of (profits)/losses on disposals | (459) | (1 620) | (789) |
| Non-cash charge for share-based compensation | 118 | 120 | 192 |
| Other adjustments | (10) | 8 | (23) |
| Cash flow from operating activities | 5 188 | 5 574 | 5 924 |
The cash flows of pension funds (other than contributions and other direct payments made by the Group in respect of pensions and similar obligations) are not included in the Group cash flow statement.
Major non-cash transactions
During 2006 the Group took a provision of €300 million for possible compensation payments relating to the 2005 conversion of preference shares, issued by Unilever N.V. in 1999. See note 19 for further details.
During 2007 the Group entered into new finance lease arrangements in respect of equipment with a capital value at inception of the lease of €51 million (2006: €51 million). In addition a lease for €181 million related to the sale and leaseback transaction carried out for the head office building in UK was signed during 2007.
On 15 February 2005 €1 129 million of treasury stock was used in the conversion of the €0.05 preference shares into ordinary NV shares.
