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Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 1. Accounting policies and valuation methods
1.2.2.
Consolidated Statement of Cash Flows
Net cash provided by operating activities
Net cash provided by operating activities is calculated using the indirect
method based on EBIT. EBIT is adjusted for non-cash items and changes
in net working capital. Net cash provided by operating activities excludes
the cash impact of financial charges and income and net changes in
working capital related to property, plant and equipment, and intangible
assets.
Net cash used for investing activities
Net cash used for investing activities includes changes in net working
capital related to property, plant and equipment, and intangible assets
as well as cash from investments (particularly dividends received from
equity affiliates). It also includes any cash flows arising from the gain or
loss of control of subsidiaries.
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 the group
Vivendi considers Adjusted Earnings Before Interest and Tax (EBITA),
Adjusted net income (ANI), and cash flow from operations (CFFO), 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 by 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 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:
p
p
EBITA
(
**
)
;
p
p
income from equity affiliates
(
*
)
(
**
)
;
p
p
interest
(
*
)
(
**
)
, equal to interest expense on borrowings net of
interest income earned on cash and cash equivalents;
p
p
income from investments
(
*
)
(
**
)
, including dividends and interest
received from unconsolidated companies; and
p
p
taxes and non-controlling interests related to these items.
It does not include the following items:
p
p
amortization of intangibles acquired through business
combinations
(
**
)
as well as impairment losses on goodwill and
other intangibles acquired through business combinations
(
*
)
(
**
)
;
p
p
other income and charges related to financial investing transactions
and to transactions with shareowners
(
*
)
, as defined above;
(*)
Items as presented in the Consolidated Statement of Earnings.
(**)
Items as reported by each operating segment.
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