LensCrafters 2013 Annual Report Download - page 38

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(4)
non-recurring Mikli restructuring costs with an approximately Euro 9 million impact on operating income
and an approximately Euro 6 million adjustment to net income.
Free Cash Flow
Free cash flow represents EBITDA, as defined above, plus or minus the decrease/(increase) in working capital over
the period, less capital expenditures, plus or minus interest income/(expense) and extraordinary items, minus taxes paid. Our
calculation of free cash flow provides a clearer picture of our ability to generate net cash from operations, which is used for
mandatory debt service requirements, to fund discretionary investments, pay dividends or pursue other strategic
opportunities. Free cash flow is not meant to be considered in isolation or as a substitute for items appearing on our financial
statements prepared in accordance with IFRS. Rather, this non-IFRS measure should be used as a supplement to IFRS results
to assist the reader in better understanding the operational performance of the Group. For additional information on Group’s
non-IFRS measures used in this report, see “NON-IFRS MEASURES – Adjusted Measures” set forth above.
The Group cautions that this measure is not a defined term under IFRS and its definition should be carefully
reviewed and understood by investors.
Investors should be aware that our method of calculation of free cash flow may differ from methods used by other
companies. We recognize that the usefulness of free cash flow as an evaluative tool may have certain limitations, including:
• The manner in which we calculate free cash flow may differ from that of other companies, which limits its
usefulness as a comparative measure;
• Free cash flow does not represent the total increase or decrease in the net debt balance for the period since it
excludes, among other things, cash used for funding discretionary investments and to pursue strategic
opportunities during the period and any impact of the exchange rate changes; and
• Free cash flow can be subject to adjustment at our discretion if we take steps or adopt policies that increase or
diminish our current liabilities and/or changes to working capital.
We compensate for the foregoing limitations by using free cash flow as one of several comparative tools, together
with IFRS measurements, to assist in the evaluation of our operating performance.
The following table provides a reconciliation of free cash flow to EBITDA and the table above provides a
reconciliation of EBITDA to net income, which is the most directly comparable IFRS financial measure:
Non-IFRS Measure: Free cash flow
(Amounts in millions of Euro)
FY 2013
EBITDA
(1)
1,431
∆ working capital 75
Capex (370)
Operating cash flow 1,136
Financial charges
(2)
(92)
Taxes (428)
Other—net (6)
Free cash flow 610
(Amounts in millions of Euro)
4Q 2013
EBITDA
(1)
256
∆ working capital 204
Capex (134)
Operating cash flow 326
Financial charges
(2)
(22)