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Cash flow statement

(€ million) Note  2009  2010
Net profit for the year
  732   844  
Minority interest
  43   50  
Adjustments to reconcile net profit to net cash
provided by operating activities:
         
- depreciation and amortisation
(N.36) 438   514  
- net impairment of tangible and intangible assets
(N.36) 2   3  
- effect of accounting using the equity method
( N.38) (7)   -  
- net gains on disposal of assets
  -   (17)  
-dividends (N.38) (2)   -  
- interest income
  (27)   (8)  
- interest expense
  61   45  
- income taxes
(N.39) 288   345  
- other changes
  38   1  
Changes in working capital:
         
- inventories
  330   293  
- trade receivables
  (22)   (313)  
- trade payables
  (568)   47  
- provisions for contingencies
  20   (34)  
- other assets and liabilities
  (91)   (213)  
Cash flow from working capital
  1,235   1,557  
Change in the provision for employee benefits
  11   13  
Dividends received   8   6  
Interest received
  26   6  
Interest paid
  (91)   (39)  
Income taxes paid net of refunds of tax credits
  (222)   (219)  
Net cash provided by operating activities
  967   1,324  
of which with related parties
(N.45)   1,912   2,771
Investing activities:
         
- tangible assets
(N.8) (1,601)   (1,533)  
- intangible assets
(N.9) (14)   (12)  
- equity investments
(N.10) -   (4)  
- financing receivables
  -   (44)  
Cash flow from investing activities
  (1,615)   (1,593)  
Disposals:
         
- tangible assets
  8   5  
- consolidated subsidiaries and businesses
  -   14  
- investments
  1   34  
- securities
  -   36  
- financing receivables
  195   49  
Cash flow from disposals
  204   138  

Cash flow statement continued
(€ million) Note  2009  2010
Net cash used in investing activities (1) (1,411) (1,455)
of which with related parties
(N.45) - -
of which with related parties
1,099 2,437
Repayments of long-term debt
(65) (1,400)
Increase (decrease) in short-term debt
(815) (778)
219 259
Net capital contributions by minority shareholders
- -
Net acquisition of treasury shares different from Saipem SpA
- -
Acquisition of additional interests in consolidated subsidiaries
- -
Sale of additional interests in consolidated subsidiaries
- -
Dividend distribution
(239) (263)
Net purchase of treasury shares
7 35
Net cash used in financing activities
(13) 31
of which with related parties
(N.45) 398 280
Effect of exchange rate changes on cash
and cash equivalents and other changes
45 44
Net cash flow for the year
(412) (56)
Cash and cash equivalents - beginning of year
(N.1) 1,398 986
Cash and cash equivalents - end of year
(N.1) 986 930
(1) Net cash used in investing activities included investments in certain financial assets to absorb temporary surpluses of cash or as part of our ordinary management of financing activities. Due to their nature and the fact that they are very liquid, these financial assets are netted against finance debt in determining net borrowings. For the definition of net borrowings, see the ‘Financial and economic results’ section of the ‘Directors’ report’.

Cash flows of such investments were as follows:

Supplementary information
(€ million) Dec. 31, 2010
Analysis of disposals of consolidated subsidiaries and businesses
 
Current assets
5
Non-current assets
-
Net liquidity (net borrowings)
-
Current and non-current liabilities
(5)
Net effect of disposals
-
Market value of holdings after control ceased -
Gain on disposals
14
Minority interest
-
Total sale price
14
less:
 
Cash and cash equivalents
-
Cash flow from disposals
14