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To: Tom Chwojko-Frank who wrote (43660)6/19/2001 5:36:27 PM
From: hueyone  Read Replies (1) | Respond to of 54805
 
Tom, Ardethan et all,

My post was limited to the options effects on free cash flow rather than all cash flows. This may be causing some confusion because John Shannon's comprehensive post last week dealt with the options exercise effect with regard to Cisco on the entire cash flow statement. I am at work now, but I will put my entire table for SEBL online later this evening. But briefly, for first quarter, I have the following results. Feel free to correct me if I have made a mistake or I missed some other adjustments that I should have reasonably been making to arrive at adjusted free cash flow.


In Millions
Net cash provided by operating activities: 139.2
Less Purchases of property and equipment 28.1
Equals Unadjusted Free Cash Flow (FCF) 111.1

Tax benefit from exercise of stock options ( 97.1)
Plus Compensation related to stock options (3.6)
Equals Options related to free cash flow that appear in the net cash provided by operations figures.
(101.5)

Options related figures as a percent of unadjusted FCF: 101.5/111.1= 91%

Adjusted FCF: 111.1-101.5=9.6 million
Divided by Diluted weighted average shares: 519.9 million shares

Equals Adjusted FCF per share: 9.6/519.9 = 1.8 cents per share


Hope this helps. Note, the compensation related to stock options appearing in the operations cash flow section is different than the proceeds for sales of shares appearing in the finance cash flow section in Tom's post below.

Best, Huey

Edit: I just spotted my egregious error Ardethan: For the first quarter, I have the three months ending March 31, 2000 rather than March 31, 2001. They are next to each other in the 10Q with first quarter year 2000 coming first. The calculation should follow the sames lines for first quarter year 2001.



To: Tom Chwojko-Frank who wrote (43660)6/19/2001 8:05:45 PM
From: FaultLine  Respond to of 54805
 
I going to try and straighten out the formatting.


Cash flows provided by (used for) operating activities:
Net income $ 485 $ 2,696
Adjustments to reconcile net income to net cash provided by (used for)
operating activities:
Depreciation 934 897
Amortization of goodwill and other acquisition-related intangibles 585 313
and costs
Purchased in-process research and development 75 62
Gains on equity investments, net -- (449)
Net loss on retirements of property, plant and equipment 21 15
Deferred taxes (20) (115)
Changes in assets and liabilities:
Accounts receivable 734 40
Inventories (374) (44)
Accounts payable (68) 370
Accrued compensation and benefits (929) (681)
Income taxes payable (427) (164)
Tax benefit from employee stock plans 69 302
Other assets and liabilities 96 39
Total adjustments 696 585
Net cash provided by operating activities 1,181 3,281
Cash flows provided by (used for) investing activities:
Additions to property, plant and equipment (2,664) (1,074)
Acquisitions, net of cash acquired (498) (1,406)
Purchases of available-for-sale investments (2,438) (2,227)
Maturities and sales of available-for-sale investments 5,221 4,900
Other investing activities (167) (293)
Net cash used for investing activities (546) (100)
Cash flows provided by (used for) financing activities:
Increase in short-term debt, net 87 143
Additions to long-term debt 11 --
Retirement of long-term debt -- (46)
Proceeds from sales of shares through employee stock plans and other 287 331
Repurchase and retirement of common stock (1,001) (1,000)
Payment of dividends to stockholders (134) (100)
Net cash used for financing activities (750) (672)
Net increase (decrease) in cash and cash equivalents $ (115) $ 2,509
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 13 $ 14
Income taxes $ 803 $ 475



To: Tom Chwojko-Frank who wrote (43660)6/20/2001 12:04:21 PM
From: Pirah Naman  Respond to of 54805
 
Tom:

Are the two bold items the only ones relevant to stock options' effect on cash flow?

It looks like they have combined option plans and employee stock purchase plans, or maybe it is just how they have chosen to label it. But I think you have captured the essence of it in this case.

- Pirah