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35
Unilever Annual Report and Accounts 2012 Report of the Directors About Unilever
ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
The reconciliation of FCF to net profit is as follows:
 mllon
2012
€ million
2011
Net proft 4,948 4,623
Taxation 1,735 1,622
Share of net profit of joint ventures/associates
and other income from non-current investments (91) (189)
Net finance costs 397 377
Depreciation, amortisation and impairment 1,199 1,029
Changes in working capital 822 (177)
Pensions and similar provisions less payments (381) (553)
Provisions less payments (43) 9
Elimination of (profits)/losses on disposals (236) (215)
Non-cash charge for share-based compensation 153 105
Other adjustments 13 8
ash flow from operatng actvtes 8,516 6,639
Income tax paid (1,680) (1,187)
Net capital expenditure (2,143) (1,974)
Net interest and preference dividends paid (360) (403)
Free cash flow 4,333 3,075
ore operatng proft and core operatng margn
Core operating profit and core operating margin means
operating profit and operating margin, respectively, before the
impact of business disposals, acquisition and disposal related
costs, impairments and other one-off items, which we collectively
term non-core items, on the grounds that the incidence of these
items is uneven between reporting periods.
The reconciliation of core operating profit to operating profit
is as follows:
 mllon
2012
€ million
2011
Operating profit 6,989 6,433
Acquisition and disposal related cost 190 234
(Gain)/loss on disposal of group companies (117) (221)
Impairments and other one-off items –(157)
Core operating profit 7,062 6,289
Turnover 51,324 46,467
Operating margin 136% 13.8%
Core operating margin 138% 13.5%
Further details of non-core items can be found in note 3 on
page 94.
ore earnngs per share
The Group also refers to core earnings per share (core EPS).
In calculating core earnings, net profit attributable to
shareholders’ equity is adjusted to eliminate the post tax impact
of non-core items. Refer to note 7 on page 105 for reconciliation
of core earnings to net profit attributable to shareholders’ equity.
Net debt
Net debt is defined as the excess of total financial liabilities,
excluding trade and other payables, over cash, cash equivalents
and current financial assets, excluding trade and other
receivables. It is a measure that provides valuable additional
information on the summary presentation of the Group’s net
financial liabilities and is a measure in common useelsewhere.
The reconciliation of net debt to the GAAP measure total financial
liabilities is as follows:
 mllon
2012
€ million
2011
Total fnancal labltes (10,221) (13,718)
Current financial liabilities (2,656) (5,840)
Non-current financial liabilities (7,565) (7,878)
ash and cash equvalents as per balance sheet 2,465 3,484
Cash and cash equivalents as per
cash flow statement 2,217 2,978
Add bank overdrafts deducted therein 248 506
urrent fnancal assets 401 1,453
Net debt (7,355) (8,781)