Financial Statements

33. Net cash provided by (used in) operating activities

The gross cash flow for 2007 of €4,784 million (2006: €3,913 million) is the cash surplus from operating activities before any changes in working capital. The cash flows by segment are shown in the table in Note [1].

The net operating cash flow from continuing operations of €4,281 million (2006: €3,928 million) takes into account the changes in working capital and other non cash-relevant transaction. The €2 million (2006: €275 million) net cash flow from the discontinued operations comprises operating income from the H.C. Starck and Wolff Walsrode business units and the diagnostics business. The total net cash flow for 2007 is €4,283 million (2006: €4,203 million).

The line “Non-cash effects of the remeasurement of acquired assets (inventory work-down)” has been inserted in the cash flow statement in order to eliminate the effects of the Schering purchase price allocation from gross cash flow. Thus, the non-cash effect of the work-down of the step-up from the remeasurement of Schering inventories to fair value as of June 23, 2006, the date of acquisition, on the gross cash flow is reversed. In 2007 €215 million (2006: €429 million) was transferred to this line from “Decrease/Increase in inventories.” These non-cash effects do not impact net cash flow.

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