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Strategies & Market Trends : Contrarian Investing -- Ignore unavailable to you. Want to Upgrade?

To: pcyhuang who wrote (620)	10/28/2006 9:55:16 AM
From: gcrispin	Read Replies (1) \| Respond to of 4080

Pcyhuang, Thank you for your reply. I must admit that I am not completely familiar with Yahoo's formula for levered cash flow. Levered cash flow appears to add back capital expenditures. Levered Free Cash Flow Formula: (EBIT + Interest Expense) * (1 – Tax Rate) + Depreciation & Amort., Total + Other Amortization + Capital Expenditure + Sale (Purchase) of Intangible assets - Change in Net Working Capital + Pref. Dividends Paid + Total Debt Repaid + Total Debt Issued + Repurchase of Preferred + Issuance of Preferred Stock Where: Tax Rate = 0.375 This figure is a normalized item that excludes non-recurring items and also takes into consideration cash inflows from financing I am more familiar with the definition of free cash flow. Investopedia's Free Cash Flow Definition Free Cash Flow Net income + Depreciation/Amortization - Change in Working Capital - Capital Expenditure ---------------------------- = Free Cash Flow The following quote is from the company's third quarter press release: "Cash flows from operating activities were $129 million for the nine months ended September 30, 2006. Capital expenditures were $44 million during the first nine months of 2006. Free cash flow, defined as cash from operating activities less capital expenditures, was $84 million for the first nine months of 2006." A PDF file available on the company's website indicates that the FCF for the third quarter was $59 million.