24 Other Operating Income and Expenses

Operating expenses include expenses for sales, marketing and research and development, as well as for logistics and central finance and administration. In addition, they include depreciation on tangible assets and amortization on intangible assets, with the exception of goodwill amortization and other depreciation and amortization which is included in the cost of sales.

Marketing working budget is the largest component of operating expenses. The marketing working budget consists of promotion and communication spending such as promotion contracts, advertising, retail support, events and other communication activities. However, it does not include marketing overhead expenses. In 2007, marketing working budget accounted for approximately 34 % (2006: 35 %) of the total operating expenses.

Total depreciation and amortization expense for tangible and intangible assets (excluding goodwill) was € 211 million and € 209 million for the years ending December 31, 2007 and 2006, respectively. Thereof, € 7 million and € 16 million were recorded within the cost of sales as they are directly attributable to the production costs of goods sold.

Total other operating income was € 80 million and € 55 million for the years ending December 31, 2007 and 2006, respectively. The other operating income consists of payments in accounts receivable previously written off in the amount of € 1 million (2006: € 3 million), releases of accruals and provisions for an amount of € 20 million (2006: € 16 million), other revenues for an amount of € 38 million (2006: € 35 million) and gains from disposals of fixed assets for an amount of € 21 million (2006: € 1 million).