E-Z-GO 2011 Annual Report Download - page 11

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10
1 Free cash flow is not a financial measure under generally accepted accounting principles (GAAP) and should be used in conjunction with
GAAP cash measures provided in our Consolidated Statement of Cash Flows. Free cash flow is a measure generally used by investors,
analysts and management to gauge a company’s ability to generate cash from operations in excess of that necessary to be reinvested
to sustain and grow the business and fund its obligations. Our definition of Manufacturing cash flow before pension contributions
adjusts net cash from operating activities of continuing operations for dividends received from TFC, capital contributions provided
under the Support Agreement, capital expenditures, proceeds from the sale of property, plant and equipment and contributions to our
pension plans. We believe that our calculation provides a relevant measure of liquidity and is a useful basis for assessing our ability
to fund operations. Our Manufacturing free cash flow measure may not be comparable with similarly titled measures reported by other
companies, as there is no definitive accounting standard on how the measure should be calculated. A reconciliation of net cash from
operating activities of continuing operations, as presented in our Consolidated Statement of Cash Flows, to Manufacturing cash flow
before pension contributions is provided below:
2 Net debt represents debt less cash and equivalents. Our calculation of net debt is provided below:
The following footnotes pertain to the Chairman’s Letter:
(In millions) 2011 2010
Net cash from operating activities of continuing operations - GAAP $ 761 $730
Less: Capital expenditures (423) (270)
Dividends received from TFC (179) (505)
Plus: Capital contributions paid to TFC 182 383
Proceeds on sale of property, plant and equipment 17 4
Total pension contributions 642 417
Manufacturing cash flow before pension contributions – Non-GAAP $ 1,000 $759
(In millions) December 31,
2011
January 1,
2011
Debt – Manufacturing group $ 2,459 $2,302
Debt – Finance group 1,974 3,660
Less: Total cash and equivalents (885) (931)
$3,548 $5,031