Page 223 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting policies and valuation methods
Net cash used for financing activities
Net cash used for financing activities includes net interest paid on
borrowings, cash and cash equivalents, bank overdrafts, as well as the
cash impact of other items related to financing activities such as premiums
from the early redemption of borrowings and the settlement of derivative
instruments. It also includes cash flows from changes in ownership
interests in a subsidiary that do not result in a loss of control (including
increases in ownership interests).
1.2.3. Operating performance of each operating segment and of the group
Vivendi considers Adjusted Earnings Before Interest and Tax (EBITA),
Adjusted net income (ANI), and Cash Flow From Operations (CFF0), non-
GAAP measures, to be relevant indicators of the group’s operating and
financial performance.
EBITA
Vivendi considers EBITA, a non-GAAP measure, to be a relevant measure
to assess the performance of its operating segments as reported in
the segment data. The method used in calculating EBITA excludes the
accounting impact of the amortization of intangible assets acquired
through business combinations, impairment losses on goodwill and other
intangibles acquired through business combinations, and other income
and charges related to financial investing transactions and to transactions
with shareowners. This enables Vivendi to measure and compare the
operating performance of operating segments regardless of whether
their performance is driven by the operating segment’s organic growth
or acquisitions.
The difference between EBITA and EBIT consists of the amortization of
intangible assets acquired through business combinations, impairment
losses on goodwill and other intangibles acquired through business
combinations, as well as other financial income and charges related to
financial investing transactions and to transactions with shareowners
that are included in EBIT. The charges and income related to financial
investing transactions include gains and losses recognized in business
combinations, capital gains or losses related to divestitures or the
depreciation of equity affiliates and other financial investments, as well
as gains or losses incurred from the gain or loss of control in a business.
Adjusted net income
Vivendi considers adjusted net income, a non-GAAP measure, to be
a relevant measure to assess the group’s operating and financial
performance. Vivendi Management uses adjusted net income because
it better illustrates the underlying performance of continuing operations
by excluding most non-recurring and non-operating items. Adjusted net
income includes the following items:
✱ EBITA (**);
✱ income from equity affiliates (*) (**);
✱ interest (*) (**), corresponding to interest expense on borrowings net
of interest income earned on cash and cash equivalents;
✱ income from investments (*) (**), including dividends and interest
received from unconsolidated companies; and
✱ taxes and non-controlling interests related to these items.
It does not include the following items:
✱ amortization of intangibles acquired through business combinations
(**) as well as impairment losses on goodwill and other intangibles
acquired through business combinations (*) (**);
✱ other income and charges related to financial investing transactions
and to transactions with shareowners (*), as defined above;
✱ other financial charges and income (*) (**), equal to the profit and loss
related to the change in value of financial assets and the termination
or change in value of financial liabilities, which primarily include
changes in fair value of derivative instruments, premiums from the
early redemption of borrowings, the early unwinding of derivative
instruments, the cost of issuing or cancelling credit facilities, the cash
impact of foreign exchange transactions (other than those related to
operating activities, included in the EBIT), as well as the effect of
undiscounting assets and liabilities, and the financial components of
employee benefits (interest cost and expected return on plan assets);
✱ earnings from discontinued operations (*) (**); and
✱ provisions for income taxes and adjustments attributable to non-
controlling interests and non-recurring tax items (notably the changes
in deferred tax assets pursuant to Vivendi SA’s tax group and the
Consolidated Global Profit Tax Systems, and the reversal of tax
liabilities relating to risks extinguished over the period).
Cash Flow From Operations (CFFO)
Vivendi considers cash flow from operations (CFFO), a non-GAAP measure,
to be a relevant measure to assess the group’s operating and financial
performance. The CFFO includes net cash provided by operating activities,
before income tax paid, as presented in the Statement of Cash Flows,
as well as dividends received from equity affiliates and unconsolidated
companies. It also includes capital expenditures, net that relate to cash
used for capital expenditures, net of proceeds from sales of property, plant
and equipment, and intangible assets.
(*) Items as presented in the Consolidated Statement of Earnings.
(**)Items as reported by each operating segment.