As a key indicator of the financial position of Merck, free cash flow was strongly impacted on the one hand by the purchase of Serono and on the other hand by the proceeds from the disposal of the Generics division. Free cash flow adjusted for acquisitions and disposals amounted to €978 million, compared with €577 million in 2006. Nominal free cash flow was €–1,473 million (2006: €–1,073 million) and is composed of net cash flows from operating activities of €1,218 million (2006: €812 million), net cash flows from investing activities of €–2,727 million (2006: €–1,462 million) as well as adjustments for payment flows in connection with financial assets of €–36 million (2006: €423 million). Net cash flows from investing activities includes the payments for the acquisition of Serono amounting to €7,280 million and the cash inflows from the disposal of Generics, less previously paid taxes and transaction costs of €4,829 million.