Understanding financial statements

In M€	2007	2006
Sales revenue - Note 1	11,923	10,863
Gross margin	2,762	2,220
Research and development expenses	(421)	(355)
Marketing, general and administrative expenses	(1,410)	(1,271)
Other operating income and expenses	(123)	(56)
Restructuring and CATS-CASA early retirement costs	(57)	(131)
Operating Income - Note 2	751	407
Financial income	64	97
Income tax	(81)	(51)
Net income of consolidated businesses	734	453
Share in net income of equity affiliates - Note 3	148	220
Net income from continued operations	882	672
Minority interests	(139)	(24)
Consolidated net income - Note 4	743	649

ASSETS In millions of euros	12/31/2007	12/31/2006
Non-current assets	21,425	17,350
Goodwill - Note 1	4,377	2,515
Fixed assets	6,933	4,989
End-of-life-cycle assets - Note 2	2,491	2,091
Assets earmarked for end-of-life-cycle obligations - Note 2	2,873	2,986
Equity affiliates	1,588	1,521
Financial assets	2,588	2,376
Deferred tax assets	604	873
Current assets	9,251	8,543
Inventories and work-in-process	2,817	2,306
Trade accounts receivable and related accounts	3,884	3,604
Other accounts receivable	1,402	1,263
Current tax assets	94	116
Cash and other current financial assets - Note 3	1,054	1,254
LIABILITIES AND SHAREHOLDERS’ EQUITY In millions of euros
Shareholders’ equity and minority interests	7,464	7,016

Non-current liabilities	11,951	8,352
Employee benefits	1,175	1,122
Provisions for end-of-life-cycle obligations - Note 2	5,075	4,585
Other non-current provisions	121	113
Borrowings due in more than one year - Note 4	4,302	1,407
Deferred tax liabilities	1,277	1,124
Current liabilities	11,262	10,526
Current provisions	1,823	1,788
Borrowings due in one year or less - Note 4	613	712
Advances and prepayments received	4,172	4,185
Trade accounts payable and related accounts	2,565	2,093
Other operating liabilities	1,921	1,650
Current tax liabilities	127	74
Other non-operating liabilities	41	23
TOTAL SIMPLIFIED BALANCE SHEET	30,676	25,893

in millions of euros	2007	2006
Cash flow from operations	1,294	1,231
Change in WCR* - Note 1	(416)	(344)
Cash from operating activities	722	797
Cash used for investing activities	(2,796)	(953)
Cash used for financing activities	1,522	(364)
Decrease (increase) in marketable securities	178	(1)
Change in consolidated Group, Forex adjustments, etc.	(7)	2
Increase (decrease) in net cash	(381)	(518)
Net cash at the beginning of the year	901	1,419
Cash at the end of the year	634	962
Short-term bank facilities and other	(113)	(61)
Net cash at the end of the year	520	901