Unilever 2009 Annual Report Download - page 129

Notes to the consolidated financial statements Unilever Group
28 Reconciliation of net profit to cash flow from operating activities
€ million € million € million
Cash flow from operating activities 2009 2008 2007
Net profit 3,659 5,285 4,136
Taxation 1,257 1,844 1,137
Share of net profit of joint ventures/associates and other income from non-current investments (489) (219) (191)
Net finance costs: 593 257 252
Finance income (75) (106) (147)
Finance cost 504 506 550
Preference shares provision ––7
Pensions and similar obligations 164 (143) (158)
Operating profit (continuing and discontinued operations) 5,020 7,167 5,334
Depreciation, amortisation and impairment 1,032 1,003 943
Changes in working capital: 1,701 (161) 27
Inventories 473 (345) (333)
Trade and other current receivables 640 (248) (43)
Trade payables and other current liabilities 588 432 403
Pensions and similar provisions less payments (1,028) (502) (910)
Provisions less payments (258) (62) 145
Elimination of (profits)/losses on disposals 13 (2,259) (459)
Non-cash charge for share-based compensation 195 125 118
Other adjustments 58 15 (10)
Cash flow from operating activities 6,733 5,326 5,188
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 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. In addition, a lease for €181 million related to the sale and leaseback transaction carried out for the head office building in the UK
was signed during 2007.
29 Share-based compensation plans
As at 31 December 2009, the Group had share-based compensation plans in the form of performance shares, share options and other share
awards. Starting in 2007, performance share awards and restricted stock awards were made under the Global Share Incentive Plan (GSIP),
except in North America where awards were made under the Unilever North America 2002 Omnibus Equity Compensation Plan.
The numbers in this note include those for Executive Directors shown in the Directors’ Remuneration Report on pages 67 to 73 and those
for key management personnel shown in note 4 on page 90. No awards were made to Executive Directors in 2007, 2008 or 2009 under the
Unilever North America 2002 Omnibus Equity Compensation Plan. Non-Executive Directors do not participate in any of the share-based
compensation plans.
The economic fair value of the awards is calculated using option pricing models and the resulting cost is recognised as remuneration cost
amortised over the vesting period of the grant.
Unilever will not grant share options in total in respect of share-based compensation plans for more than 5% of its issued ordinary capital, and
for all plans together, for more than 10% of its issued ordinary capital. The Board does not apportion these limits to each plan separately.
The actual remuneration cost charged in each period is shown below, and relates almost wholly to equity settled plans:
€ million € million € million
Income statement charge 2009 2008 2007
Performance share plans (166) (97) (103)
Other plans(a) (29) (28) (49)
(195) (125) (152)
(a) The Group also provides a Share Matching Plan, an All-Employee Share Option Plan, a TSR Long-Term Incentive Plan (no awards after 2006)
and an Executive Option Plan (no awards after 2005).
126 Unilever Annual Report and Accounts 2009
Financial statements