Understanding financial statements

In M€	2008	2007
Sales revenue - Note 1	13,160	11,923
Gross margin	2,286	2,762
Research and development expenses	(453)	(421)
Marketing, general and administrative expenses	(1,587)	(1,410)
Other operating income and expenses	171	(123)
Restructuring and CATS-CASA early retirement costs	-	(57)
Operating Income - Note 2	417	751
Financial income	(29)	64
Income tax	(46)	(81)
Net income of consolidated businesses	343	734
Share in net income of equity affiliates - Note 3	156	148
Net income from continued operations	498	882
Minority interests	(91)	(139)
Consolidated net income - Note 4	589	743

ASSETS In millions of euros	12/31/2008	12/31/2007
Non-current assets	22,841	21,425
Goodwill - Note 1	4,803	4,377
Fixed assets	8,002	6,933
End-of-life-cycle assets - Note 2	270	2,491
Assets earmarked for end-of-life-cycle obligations - Note 2	4,954	2,873
Equity affiliates	1,757	1,588
Financial assets	2,152	2,588
Deferred tax assets	900	604
Current assets	11,804	9,251
Inventories and work-in-process	3,403	2,817
Trade accounts receivable and related accounts	4,486	3,884
Other accounts receivable	2,434	1,402
Current tax assets	164	94
Cash and other current financial assets - Note 3	1,317	1,054
LIABILITIES AND SHAREHOLDERS’ EQUITY In millions of euros
Shareholders’ equity and minority interests	7,292	7,464

Non-current liabilities	11,795	11,951
Net employee benefits	1,267	1,175
Provisions for end-of-life-cycle obligations - Note 2	5,674	5,075
Other non-current provisions	123	121
Borrowings due in more than one year - Note 4	3,969	4,302
Deferred tax liabilities	760	1,277
Current liabilities	15,558	11,262
Current provisions	2,081	1,823
Borrowings due in one year or less - Note 4	2,693	613
Advances and prepayments received	4,752	4,172
Trade accounts payable and related accounts	2,991	2,565
Other operating liabilities	2,884	1,921
Current tax liabilities	104	127
Other non-operating liabilities	53	41
TOTAL SIMPLIFIED BALANCE SHEET	34,644	30,676

in millions of euros	2008	2007
Cash flow from operations	904	1,294
Change in WCR* - Note 1	(446)	(416)
Cash from operating activities	81	722
Cash used for investing activities	(1,259)	(2,796)
Cash used for financing activities	1,516	1,522
Decrease (increase) in marketable securities	42	178
Change in consolidated Group, Forex adjustments, etc.	(22)	(7)
Increase (decrease) in net cash	357	(381)
Net cash at the beginning of the year	520	901
Cash at the end of the year	1,050	634
Short-term bank facilities and other	(172)	(113)
Net cash at the end of the year	877	520