(in millions of euros) Operating activities Note Year ended December 31, 2019 2018 EBIT 4 1,381 1,182 Adjustments 21 779 432 Content investments, net (676) (137) Gross cash provided by operating activities before income tax paid 1,484 1,477 Other changes in net working capital 67 (28) Net cash provided by operating activities before income tax paid 1,551 1,449 Income tax (paid)/received, net 6.2 (283) (262) Net cash provided by operating activities 1,268 1,187 Investing activities Capital expenditures 3 (413) (351) Year ended December 31, (in millions of euros) Items related to operating activities with no cash impact Note 2019 2018 Amortization and depreciation of intangible and tangible assets Change in provision, net 3 744 453 30 (25) Other non-cash items from EBIT 4 Other Income from equity affiliates - operational (4) (7) Proceeds from sales of property, plant, equipment and intangible assets Adjustments 9 7 779 432 Which of the following is a POTENTIAL PROBLEM with this UFCF calculation if you use these numbers from the statements as-is, without any adjustments? a. You can't necessarily add back the entire D&A figure because under IFRS, some of it will be the Depreciation or Amortization element of the company's Operating Lease Expense. b. You need to adjust EBIT so that it deducts the Interest element of the Operating Lease Expense. c. Some of the Amortization may be the Amortization of Financing Fees or Debt Discounts, so you should not add back those portions. d. "Content investments, net" should not count as a part of the Change in Working Capital because non-media/telecom companies do not have this line item. e. All of the above. f. Answer choices 1 and 2. g. Answer choices 1, 2, and 3. h. Answer choices 1, 2, and 4.
(in millions of euros) Operating activities Note Year ended December 31, 2019 2018 EBIT 4 1,381 1,182 Adjustments 21 779 432 Content investments, net (676) (137) Gross cash provided by operating activities before income tax paid 1,484 1,477 Other changes in net working capital 67 (28) Net cash provided by operating activities before income tax paid 1,551 1,449 Income tax (paid)/received, net 6.2 (283) (262) Net cash provided by operating activities 1,268 1,187 Investing activities Capital expenditures 3 (413) (351) Year ended December 31, (in millions of euros) Items related to operating activities with no cash impact Note 2019 2018 Amortization and depreciation of intangible and tangible assets Change in provision, net 3 744 453 30 (25) Other non-cash items from EBIT 4 Other Income from equity affiliates - operational (4) (7) Proceeds from sales of property, plant, equipment and intangible assets Adjustments 9 7 779 432 Which of the following is a POTENTIAL PROBLEM with this UFCF calculation if you use these numbers from the statements as-is, without any adjustments? a. You can't necessarily add back the entire D&A figure because under IFRS, some of it will be the Depreciation or Amortization element of the company's Operating Lease Expense. b. You need to adjust EBIT so that it deducts the Interest element of the Operating Lease Expense. c. Some of the Amortization may be the Amortization of Financing Fees or Debt Discounts, so you should not add back those portions. d. "Content investments, net" should not count as a part of the Change in Working Capital because non-media/telecom companies do not have this line item. e. All of the above. f. Answer choices 1 and 2. g. Answer choices 1, 2, and 3. h. Answer choices 1, 2, and 4.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:(in millions of euros)
Operating activities
Note
Year ended December 31,
2019
2018
EBIT
4
1,381
1,182
Adjustments
21
779
432
Content investments, net
(676)
(137)
Gross cash provided by operating activities before income tax paid
1,484
1,477
Other changes in net working capital
67
(28)
Net cash provided by operating activities before income tax paid
1,551
1,449
Income tax (paid)/received, net
6.2
(283)
(262)
Net cash provided by operating activities
1,268
1,187
Investing activities
Capital expenditures
3
(413)
(351)
Transcribed Image Text:Year ended December 31,
(in millions of euros)
Items related to operating activities with no cash impact
Note
2019
2018
Amortization and depreciation of intangible and tangible assets
Change in provision, net
3
744
453
30
(25)
Other non-cash items from EBIT
4
Other
Income from equity affiliates - operational
(4)
(7)
Proceeds from sales of property, plant, equipment and intangible assets
Adjustments
9
7
779
432
Which of the following is a POTENTIAL PROBLEM with this UFCF calculation if you use these
numbers from the statements as-is, without any adjustments?
a. You can't necessarily add back the entire D&A figure because under IFRS, some of it
will be the Depreciation or Amortization element of the company's Operating Lease
Expense.
b. You need to adjust EBIT so that it deducts the Interest element of the Operating
Lease Expense.
c. Some of the Amortization may be the Amortization of Financing Fees or Debt
Discounts, so you should not add back those portions.
d. "Content investments, net" should not count as a part of the Change in Working
Capital because non-media/telecom companies do not have this line item.
e. All of the above.
f. Answer choices 1 and 2.
g. Answer choices 1, 2, and 3.
h. Answer choices 1, 2, and 4.
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