I tried to reply to your repost three times (all three times with extensive typing) and the browser crashed each time (IE 4 release). This is a aggravated short version. The numbers that I posted were from a model that allows you to do what if scenarios, and I was in the middle of one such scenario, my apologies. This being said, INTCs capital expenditures for FY 96 are $2535. This is calculated internally so as to avoid any accrual accounting shenanigans and tricks. I will post NOPAAT (net operating profits after an adjustment for taxes) This is a much more honest expression of raw profits without a charge for risk. NOPAAT is used to derive free cash flow by adjusting it for depreciation, capital expenditures, and change in net working capital (these items sans deprec. are all investments, yet GAAP and current sell side analyst practice accounts for them as expenses thus distorting the profit and loss and cash flow picture significantly). You can use NOPAAT to get to the FCF figure (a very stringent method) or you may derive directly form net income making all of the necessary adjustments along the way). FCF is calculated many different ways, dependign on who you talk to. I tend to make it a function of net profits and investment.
Reconciliation to Net Income
1996
Net Income 2,325.8
Add: Increase in Deferred Taxes 0.0
Add: Goodwill Amortization 0.0
Add: Extraordinary Items 0.0
Add: Special Items After Tax 0.0
Add: Minority Interest 0.0
Add: Deferred Revenue Reserve 0.0
Add: LIFO Reserve 0.0
Adjusted Net Income 2,325.8
Add: Interest Expense After Tax 36.6
Add: Interest Expense on Oper Leases 0.0
Add: Interest Expense on Retiree Related Liabilities 21.8
Total Income Avail to Investors 2,384.2
Less: Interest Income After-Tax 5.3
Less: Nonoperating Income After Tax 2.2
NOPAAT 2,376.8
If you would like me to walk through the full econcomic valuation of INTC (or possibly AMD in the future), let me know. In the mean time, I encourage you to download the ITNC valuation model from the valuation menu at the top of the folling link (I am trying to wrok the bugs out).
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