51 HEINEKEN N.V. ANNUAL REPORT 2008 The average tax burden increased from 31.0 per cent in 2007 to 35.6 per cent in 2008. The increase was mainly due to the negative impact on the effective tax rate of the impairment on the goodwill of Russia, calculated on a significantly lower profit before income tax. This impairment does not result in a corresponding tax benefit (non-deductible) and increases the effective tax rate. This effect was partly compensated by an increase of the benefit of tax incentives. In 2007 the effective tax rate was negatively impacted by the European Commission fine, which was treated as non-deductible. Without exceptional items, the effective tax rate would have been 26.0 per cent in 2008 compared to 26.5 per cent in 2007. Basic earnings per share decreased from €1.65 to €0.43 as a result of significantly lower net profit. Cash flow millions of EUR 2008 2007 Cash flow from operations before changes in working capital and provisions 2,329 2,060 Total change in working capital (47) (45) Change in provisions and employee benefits (114) (71) Cash flow from operations 2,168 1,944 C ash flow related to interest, dividend and income tax (508) (415) sh flow from operating activities 1,660 1,529 C ash flow used in operational investing activities (1,110) (866) i ee operating cash flow 550 663 f ash flow used for acquisitions and disposals (3,634) (259) jsh flow from financing activities 3,309 (631) :t cash flow 225 (227) ■sh flow and investments ee operating cash flow of €550 million was €113 million behind 2007's performance. Although cash flow >m operations before changes in working capital and provisions increased year-on-year by €269 million, is was more than offset due to: Higher change in provisions and employee benefits, mainly due to higher contributions paid compared to charged expenses to the income statement in newly acquired companies. Higher interest paid of €222 million because of the increase in net debt from the debt-financed acquisition of S&N and other acquisitions and lower taxes paid of €124 million. Increase of €244 million cash flow used in operational investing activities as a result of planned capacity increases in Congo, Tunisia, DRC, Russia and other countries in Central and Eastern Europe and purchased contract-based intangibles. e cash conversion rate of 48 per cent is slightly behind 2007's cash conversion rate of 53 per cent. ancing structure lillions of EUR20082007 taj equity 4,752 23 5,711 ferred tax liabilities 637 3 427 4 688 3 586 5 344 2 158 est-bearing loans and borrowings 9,644 47 2,320 her liabilities 4,498 22 2,752 20,563 100 11,954 100

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