Advanced Financial Management :

CORPORATE FINANCE
Laurent BARTHE
CETIA
 Synopsis
Financial Analysis
• Accounting system (GAAP, IAS/IFRS…)
• Financial analysis : introduction
• Indicators
• Cash and working capital

Financial Analysis and international finance

• Financial statements and Financial analysis of an international group
• Detailed Financial analysis of the group
• Example of an international group : ACCOR’s annual report.

Long-term decision making

  Investment decision
• Introduction
• Capital budgeting and risk
• Opportunity cost and Discount rate
EXERCICES

  Financing decision
• Sources of long-term financing
• The capital structure question

written exam ( Close book- Bring a calculator)

- 1.5 hours for the paper
 Bibliography
Reference books :
• Corporate Finance , Ross S.A , Westerfield and Jaffe,
International student edition, Irwin series.
• Corporate finance, J.BERK § P.DE MARZO, Pearson
education.
• Principles of corporate Finance, Brealey, Myers, Allen ; Mc
Graw-Hill, Irwin.
• Understanding Financial statements , eighth edition, Lyn
M FRASER Aileeen ORMISTON, Pearson education
 Research papers (Basic research)
- BLACK and SCHOLES , « The pricing of options and
coporate liabilities », journal of political Economy, 81
(may 1973), P.637.
- Myers S.C , « The capital structure puzzle », Journal of
finance, july 1984.
- Modigliani and M.H Miller , ‘the cost of the capital,
corporation finance and the theory of investment’,
American Economic review 48, June 1958, P261-297.
- Sharpe W , « Capital assets prices : a theory of market
equilibrium under conditions of risk’, Journal of finance
19, Sptember 1964, P.425-442.
 Present research (selection)
- K.KAISER § S.David Young , « Need cash : Look inside
your company », Harvard Business review, May
2009, P64 -70.
- Chris GUILDING and Dawne Lamminmaki,
“Benchmarking Hotel Capital Budgeting Practices To
Practices Applied in Non-Hotel Companies »,Journal
of hospitality and tourism research, 2007.
- Nigel Evans, Assessing the balanced scorecards a
management tool for hotels,,International Journal of
Contemporary Hospitality Management Vol. 17 No.
5, 2005,pp. 376-390
What are the three basic questions of
corporate finance ?
1- Investment decision (capital budgeting) : What
a long -term investment strategy should a firm
adopt?
2- Financing decision (capital structure) : How
much cash be raised for the required
investments ?
3- Short term finance decisions (working capital):
How much short –term cash flow does company
need to pay its bills?
 Introduction
The most important job of a financial manager is to create
value from the firm ‘s capital budgeting , financing and
liquidity activities. How do financial managers create value ?
1- The firm should try to buy assets that generate more cash –
flow than they cost.

2- The firm should sell bonds and stocks and other financial
instruments that raise more cash than they cost.
Thus the firm must create more cash flow than it uses.
 I - Financial Analysis
• Accounting system (GAAP, IAS/IFRS…)
• Introduction to financial analyses
• Financial analysis : objectives
• Financial statements and Financial analysis of
an international group
• Detailed Financial analysis of the group
• Example of an international group : ACCOR’s
annual report.
1. Systems of accounts
• Accounting data are the external auditor’s basic need,
whereas importance is given to dispose of facts & figures
reflecting company’s financial reality.

• There is a legal obligation to provide yearly accounts in

line with countries’ distinct constraints. These yearly accounts
comprise at least of : 1 balance sheet, 1 Profit and Loss
Accounts, and 1 Appendix.

• In USA, FASB has designed financial statements’ norms:

they comprise of : 1 balance sheet, 1 PnL, 1 Social Capital
variations’ table, 1 cash flows ‘ statement, 1 Appendix.
• Systems of Accounts can be divided in 2
categories:
a) Tax influence zone (France, Germany, Spain,
Italy, Belgium)
b) Capital markets’ influence zone (UK, Holland,
USA…) where Tax Law has little influence on
accounting practice. Accounts are not published
from a Tax perspective, but aim at translating a
‘true and fair view’, of economic reality,
especially for shareholders’ sake.
• 3 authorities influence Accounting legislation:
- National Law( France , Italie… following EU directives).
- Professional Accounting boards ( i.e. : FASB –Financial Accounting Standards
Boards in USA : comprising of 4 accounting professionals and 3 representants of
business sector, public service or universities)
- Stock Exchange authorities (i.e. : SEC in USA = Securities Exchange Comission): to
protect small investors, for public issue and so on

Upon certain conditions, accounts might be audited by Government auditors

(eventhough the recent « ENRON affair » questioned their independance!)

• Towards an international normalization ?

- Accouting norms & regulations have been national throughout the whole 20 th
century, despite of some normalization attempts (especially in Europe). Differences
made comparisons between companies of distinct nationalities difficult.
• In 1973, an agreement was signed in London : objective =
creating the International Accounting Standards Committee
(IASC). Mission = come up with basic accounting international
standards eventually acceptable globally.
This Committee is based in London and has been renamed,
« IASB « (B for « Board »).

• End of 90’s, following an agreement between IASC and

IOSCO (International Organisation of Securities Comission) ,
companies whose financial statement are in line with
international accounting norms will not have to re-process
their accounting in view of being quoted on Stock Exchange
Market. That applies even in USA ( in order to be quoted on NYSE,
companies must meet SEC demands in terms of accounting data and
prepare merged accounts whilst respecting accounting rules running in
USA (US GAAP)
• Since 1st January 2005, companies quoted on
the European SEM (EURONEXT), whatever
nationalty they are, must present accounts
according to IAS norms (International
Accounting Standards ) published by l’IASC
/IFRS (Information Financial Reporting
Standards )themselves published by IASB .
• All businesses in the world can use IAS
standards if they wish to.
 Financial communication

French company
quoted on Euronext

French IAS § IFRS

standards consolidated IS
CNC and BS

International indicators Operating

profit before
RBE/EB from US GAAP (EBITDA, tax and non
E EBIT, …) reccuring
items
2- Introduction to financial to statement
analysis

Revenue is vanity
Profit is sanity
Cash is reality
 Introduction
• Financial statements are firm-issued
acounting reports with past performance
information that a firm issues periodically (at
least annually)

• Firms evaluate their performance and

communicate this information to investors…
through their financial statements
 Financials statements : overwiew of the firm’s financial performance

Operations : sales, Rules and

purchase … standard format :
GAAP (generaly
Accounting entry accepted accounting
principles) or others
standards

Financial statements
Auditor :
check the
annual Statement
Balance Income
financial of cash
statements sheet statement
flow

Creditors
/lenders Managers Investors
(bankers…)
Indicators
 Challenges
1- Using simple but comprehensive tools which can be
translated into actions
Example : a cash flow indicator must encourage operational people to act not only
on the EBITDA (earnings before interest, taxes, depreciation and amortization*) but
also on two other levers,i.e working capital and investments

EBITDA (difference between cash earnings after invoicing and direct operating expenses)
illustrates the operational performance of companies located in different countries where
fiscal and depreciation practices may differ.

*Depreciation and amortisation are a book entry to reflect the usage of fixed assets rather than a cash
cost.

EBITDA is a good approximation for cash generated from operations (trading)

only if the movements in working capital are small or self-cancelled
 Working capital Cycle
• WC is defined as the money tied up in inventory
and receivables less payables.

Supplier Inventory Customer

CASH

Money tied up in this cycle has to be funded and can drain the ressources required
for investment in assets.
 Working capital
• WC turnover measures how effective a
company is in managing the cash tied-up in its
day to day operations.
Revenue As WC becomes leaner the
multiple will increase
Working Capital

• Day measures :the aim of effective WC

management is to minimise the number of days
taken for cash to complete the cycle.
Inventory days +receivables days-Payables days
 Working capital management (annual
activity by convention 360 days)

Goods
received
10 D Goods sold 40 D Cash received
Inventory days Receivable days
Goods helds as inventory
Money owned by customers
TIME
Cash tied up
Money due to suppliers
as WC
PAYABLES DAYS

30 D Cash paid out

WC days?
Is it possible to create ‘negative’ WC ?
Limit to the usefulness of net income as a barometer of financial health

It is possible for a firm to be higly profitable and :

- Not be able to pay dividends or invest in new
equipment
- Not be able to service debt
- and go bankrupt

YEAR 1 YEAR 2
Sales $ 50.000 $ 100.000
- Expenses 40.000 $ 70.000

Net income $ 10.000 $ 30.000

 There are some additional facts however that are relevant but
that do not appear on the firm’s income statement

1.In order to improve sales, firm eased its credit

policies
2. A new line of inventory near the end of year 1,
and became apparent during year 2 that the
inventory could not be sold (except reductions
below cost)

3. Suppliers refuse the sale of goods on credit

(regarding rumors concerning firm’s problems)
 Balance sheet at December 31
Year 1 Year 2 $ Change
Cash $ 2.000 $ 2.000
Accounts receivable 10.000 30.000
Inventories 10.000 25.000
TOTAL ASSETS 22.000 57.000

Accounts payable 7.000 2.000

Notes payable-Banks 0 10.000
Equity 15.000 45.000
TOTAL LIABILITIES AND EQUITY $ 22.000 $ 57.000

The effect of these additional factors can be

found on balance sheet
 If net income is recalculated on a cash basis, the
following adjustments would be made, using the
accounts balance changes between Y1 and Y2:
NET INCOME : $30.000
Accounts receivable (20.000) Outflow
Inventories (15.000) Outflow
Accounts payable (5.000) Outflow
Cash income ($10.000)

How did firm cover its $10.000 cash shortfall?

Note the appearence of a $10.000 note payable
to a bank on the Y2 balance sheet.

The borrowing has enabled to continue to

operate.
And after ? If the cost of borrowing increases?

The problems will compound unless the

company can begin to generate cash from
operations.
 Levers of cash management

Cash Payables
from (creditors)
operating
activites W
C

Cash from
financing
and
investing
activities
 Cash flow statement
• It summarises the cash received and paid out during a period of time
(month or year)

Cash flow from operations The cash

Operating income generated from
Add back depreciation and other non cash deductions trading : a surplus
Movement in inventory can be used to
Movement in receivables fund the purchase
Movement in payables of new assets

Cash flow from investing activities

Acquisition or disposal of fixed assets ( property, equipment…)
or businesses
Cash flow from financing activities
Dividends paid
Additions or reductions to short –term or long –term
borrowings
Sales of common stock
Tax paid (to a government)
 Example
• A business issues 1.000 shares of $1 each
raising $ 1.000. The cash in the business would
rise and the liability to the investor would
increase
Assets Liabilities

CASH 1.000 Shares

1.000
• A machine is purchased by the business for $
600.The cash will go down and be replaced by
a fixed asset.
ASSETS LIABILITIES

Fixed asset 600 Shares 1.000

Cash 400
1 000 1 000
• Inventory worth $ 500 is purchased on credit for
resale.

ASSETS Liabilities
Fixed assets 600 Shares 1.000
inventory 500 Payables 500
cash 400

1 500 1 500
• Half on the inventory is sold on credit for $ 400.
Profit : 400 – 250 = 150 (profit is recorded when a
product or service is delivered rather than when cash is
received)

ASSETS Liabilities

Fixed assets 600 Shares 1.000

Inventory 250 Profit 150
Receivables 400 Payables 500
Cash 400
1. 650 1.650
The business pays $ 80 for staff and utilities. This is an expense
and will reduce the profit and the cash too.

ASSETS Liabilities

Fixed assets 600 Shares 1.000

Inventory 250 Profit 70 (150-80)
Receivables 400 Payables 500
Cash 320
1. 570 1.570
Detailed account (the net balance of all the transactions
is the amount of cash held at the end of the period)
Cash account
Initial investment 1.000 Purchase of asset 600
Expenses 80
balance to carry down 320

1 000 1 000

CASH RECEIVED CASH PAID

Income statment ( expansion of the profit line )
Revenue 400
Cost of sales (250)
Gross profit 150
Expenses (80)
Net income 70
 Cash flow statment (records the transactions
from the start of the year to the end)
Net income 70
Increase in inventory (250)
Increase in payables 500
Increase in receivables (400)
Cash from operations (80)
Purchase of new fixed assets (600)
Cash from investing activities (600)
Investment by shareholders 1 000
Cash flow from financing 1 000
Movement in cash 320
 EBITDA - EBITDAR
• An approximation to the cash from operations is
EBITDA : measure widely used by investment
banks and analysts to understand a business’s
ability to generate cash and service debt.

• Some organisations (airlines, hospitality

industrie…) also use a measure of EBITDAR where
the R and L stand for rentals and lease
A substantial number of their assets are rented or leased
(equivalent to depreciation and interest payments on owned assets)
 Challenges
2- Tailoring indicators to the level of
organization (group, business units, Revenue
Centre…)
Example : In a business unit, the free cash flow* is defined
before tax and financial expenses since the business unit does
not have enough autonomy to organize its own financial
structure (choice of financing modes through loans) , which
impacts taxation.

* Free cash flow : cash generated from operations (EBITDA +- changes in

working capital) less the interest paid, less the tax paid and less the capital
expenditure ( money invested in new fixed assets)
 BANKS Stock exchange
Shareholders /creditors market

Capital Corporate ( parent Consolidated

budgeting company) statements(inc
and funding ome, BS,Cash
plan flow…)

Hotel 1 Hotel 2

Reporting
(daily
Room Food and Others report,
division beverage departements income
statment
…)
Financial indicators used by hospitality
industry
 FI : their limitations
• Financial indicators are a priori measurement
systems: it is often too late to take remedial actions
when the indicator(s) point(s) to the red
• Financial indicators, ratios especially, can be
mishandled
• Difficulty to establish a link between the indicators
and the main strategic goals, research,
communication and CSR actions.
• Yet, they remain essential to measure the mid-term
competitiveness of companies
Balanced Business scorecard : portfolio of measures
that are both financial and non -financial

Source : Kaplan R.S and Norton D.P, Balanced scorecard : Transleting

strategy into action.
 « Assesing the balanced scorcard as a
management tool for hotels », N.EVANS, 2005
• P 385 : «  The research carried out indicates, contrary
to the findings of Atkinson and Brander Brown
(2001), that the hotels surveyed are in fact using a
wide variety of performance measures and that they
are taken from all four of the categories identified by
Kaplan and Norton (2001) »

• « Larger and chain hotels apear to be more actively

measuring their performance in a formal way,
utilising a range of variables »
 Financial statements
• Balance sheet
• Income statment
• Cash Flow statment
 Balance sheet : lists the firm’s assets and liabilities; snapshot of
the firm’s financial position at a given point in time.
Assets (in $ millions) Liabiliies and stockholders’ Equity
Current assets Currents Labilités
Cash cash or Accounts payable (suppliers)
Accounts receivable ( client) assets liabilities
Notes payable-banks that will be
Inventories converted Current maturities of long satisfied
Other currents assets into cash Term debt within 1
Total current assets within 1 Y Other current liab. year

Long-term assets Long term liabilities

Land Long-term debt liabilities that
Buildings Investment Deferred taxes extend
Equipment Total long term liabilities beyond
Less accumulated depreciation 1
Net property, plant and equipment Total liabilities year
Others long-term
Total long term assets Stockholders’ Equity - Common stock
- retained earnings
TOTAL ASSETS Total liabilities and stockholders equity
 Questions
1- Could you explain the item : stockholders’
equity (or shareholders’ equity)? What does it
represent ?
2- Is it a ‘true and fair view’ of the firm?
3- ‘market capitalisation’: what does it mean?
4- What is the working capital?
 Solutions

1- ASSETS – Liabilities. It is also called the book

value of equity; is an accounting measure of the
firm’s net worth.
2- No because :
- Many of the assets listed are valued based on
their historical cost rather than their true value
today (office bulding…)

- Many of the firm’s valuable assets are not

captured : expertise of firm’s employees, firm’s
reputation in the marketplace, quality of
management team…do not appear on balance
sheet
3- Market capitalisation is different of the book
value . The total market value = market price
per share × Number of shares.

• The market value depends on what investors

expect those assets to produce in the future.
That’s why the market value is higher than the
book value .

• Should we consider like a poor performance a

book value negative?
• Not necessarily : creditors recognize that
assets are worth far more than their book
value.
4- working capital or net working capital(NWC)
• Working capital is an indicator of the operating cycle
(time required to purchase or manufacture
inventory, sell the product and collect the cash).
• The importance of this indicator depends of the
industry

Firms with positive working capital may face a cash

shortage.
Example : Your director requests an evaluation for a firm wich is a target for
your company (year ended december 31)
Assets In $ mill. Liabilities and SE In $ mill.
Current assets Current liabilities
Cash 19.5 Accounts payable 24.5
Accounts receivable 13.2 Notes payable 3.2
Inventories 14.3 Current maturities of long term debt 12.3
Other current assets 1.0 Other current liabilities 4.0
Total current assets 48.0 Total current liabilities 44.0

Long term assets

Land 20.7 Long term liabilities
Building 30.5 Long term debt 56.3
Equipment 33.2 Capital lease obligation -
Less accumulated depreciation (17.5) Total debt 56.3
Net property and equipment 66.9 Deffered taxes 7.4
Others long term 14.0
Total long term liabilities 63.7
Total long term assets 80.9
Total liabilities 107.7
Stockholders‘ equity 21.2
TOTAL ASSETS 128.9 Total liabilities and 128.9
Balance (US GAAP standard)
stockholders’equity
 Financial analysis : what should we learn from analyzing a
firm’s balance sheet?
• Book value is not a good estimate of its true value
but sometimes is used as estimate of the liquidation
value of the firm (value that would be left if its assets
were sold and liabilities paid)
Book value : 128.9- 107.7 = 21.2
• Firm’s Leverage or debt-equity ratio (total debt /
total equity) : (3.2+12.3+56.3) / 21.2 = 3.4
measures the riskiness of the firm’s capital structure : the
higher the proportion of debt, the greater is the risk because
creditors must be satisfied before owners in the event of
bankruptcy.
• Long term debt to total capitalization
long term debt / (LTD + Stockholder’s equity)
56.3/ ( 56.3 + 21.2) = 0.72

It reveals the extent to wich long-term debt is used

for the firm’s permanent financing (both long term
debt and equity).
Comment :
We have a risky capital structure in this
example :
a-failure to satisfy the fixed charges
bankruptcy
b- difficulty obtaining additional debt
financing except with high interest rates.
 Creditors often compare a firm’s current assets
and currents liabilities to asses whether the firm
has sufficient cash to meet its short –term needs.
This comparison is summarized sometimes in
liquidity ratio

• Current ratio (current assets/current liabilities) :

48/44 = 1.09
• Quick ratio :more rigourous test of short term
solvency (currents assets –inventory )/ Current
liabilities. (48-14.3) / 44 = 0.76.
• The result is not the same ! Ratios to compare to the
firm’s own trends and to other firms
 Working capital
• ( Receivables + Inventories) - Payables
• (13.2 +14.3) – 24.5 = 3

Positive NWC : cash tied up as WC

Should you reduce receivables and
inventories or / and increase payables ?
 Financial ratios
• Market to book ratio (or price to book ratio):
Market value of equity/ Book value of equity
this ratio for most successful firms exceeds 1
For example, for google it is 15 (average for
technology firms is about 6)
Low PBR : value stocks
High PBR : growth stocks
In our example : firm has 3.6 millions shares
and these shares are trading for a price of
$12 . What is PBR?
 Financial ratios

• Market capitalization :12 × 3.6 = 43.2 million

• PBR = 43.2 / 21.2= 2.03

Investors are willing to pay more than twice
the book value

Book value per share : 21.2 / 3.6 = $ 5.9

 INCOME STATEMENT
• Whereas the balance sheet shows the firm’s assets
and liabilities at a given point in time, the income
statement shows the flow of revenues and expenses
generate by those assets and liabilities between two
dates.
• Sometimes called a profit and loss, or
« P§L »statement and also referred to as the firm’s
earnings.
• The last or « bottom » line of the income statement
shows the firm’s net income, wich is a measure of its
profitability during the period.
Example income statement sheet year ended dec 31
In $ millions
Total sales 176.1
Cost of sales (or cost of good sales) (147.3)

GROSS PROFIT (or Gross margin) 28.8

Selling and administrative expenses (15)
Advertising (5.5)
Repairs and maintenance (0.1)
Depreciation and amortization (1.0)

OPERATING INCOME or EBIT* 7.2

Interest income (expense) (4.6)
PRETAX INCOME 2.6
Income Tax (0.6)
NET INCOME (or net earnings) 2

* Earnings before
Earnings per shareinterest
(EPS) ? and tax
 Income statement analysis
• Income statements provides very useful information regarding the
profitability of a firm’s business and how it relates to the value of
the firm’s share.
• Compute the following ratios :
- Profitability ratios : 1 Gross profit margin ( gross profit / total sales)
2 Operating margin = (operating income/ total sales)
3 Net profit margin = ( Net income / total sales)

- EBITDA (earnings before interest taxes, depreciation and

amortization) . Depreciation and amortization are not cash expenses for the firm,
EBITDA reflects the cash a firm has earned from its operations.

- Investment returns :
1- ROE : Return on equity (Net income/ Book value of equity)
2- ROA : Net income / assets
 Solutions
• Profitability :
- Gross profit margin ( 28.8 /176.1) : 16.3 % (measurement of a
company's manufacturing and distribution efficiency during the
production process)

- Operating margin : 4.03 % (reveals how much a company earns

before interest and taxes from each dollar of sales).
Depends of : efficiency and strategy (low –cost strategy for
example)

- Net profit margin : 1.13 % ( shows the fraction of each dollar in

revenues that is aivailable to equity holders after the firm pays
interest and taxes. Here for sales $ 100 , $ 1.13 aivailable to
equity holders). Depends of efficiency but also of the financial
structure (amount of interest payment).
 Solutions
• EBITDA : EBIT + depreciation and amortization
7.2 +1.1 = $ 8.3 billion ( cash generated by operations)

•Investment returns
ROE = (2/ 21.2) × 100 = 9.43 %
ROE provides a measure of the return on stockholders’
(owners’) investment
ROA = ( 2/128.9) × 100 = 1.55 %
ROA measures overall efficiency of firm in managing
assets and generating profits.
 Return on Equity

ROA : NI/ASSETS .This ratio provides

an indication of how effectively a
business is utilizing its investments in
assets
 HYP 1 -
Restaurant
• Turnover (sales) : 100 000
• Total Assets : 800 0000
• Net income (suppose that NI is Operational
margin) : 10 000
Net margin : NI/sales : 10 000 /100 000 = 0.10

Assets turnover : 100 / 800 = 0.125

NI/ASSETS : (10 000/ 800 000) * 100 = 1. 25 %

 HYP 2-Occupancy rate increase
• New assumption : Sales = 200 000
Net margin : 10 %
Asset turnover : 200 /800 = 0.25

Now ROA = 2.5 %

 HYP 3 -Net income Margin
increase
• Net margin : 20 000
• Sales :100 000
• Total assets : 800 000
 solution
• Net margin: 20 %

• Assets turnover : 0.125

• Now ROA is: 2.5 %

 Assets : 800 000
HYP 1 HYP 2 SALES HYP 3 NM
SALES 100 000 200 000 100 000
NET MARGIN 10 % 10 % 20 %
ASSETS TURNOVER 0.125 0.25 0.125

ROA 1.5 % 2.5 % 2.5 %

 Income statement analysis

• Working capital days :

- For example firm’s accounts receivable in terms of the
number of day’s worth of sales that it represents, called the
accounts receivable days ( Accounts receivable / Annual sales)
× 365 days.

- Accounts payables days (accounts payable/cost of good sales) ×

365
 Valuation ratios
Analysts use the price earning ratio (PER) to gauge
the market value of the firm.
PER = (Market capitalisation/Net income) or
(share price/ earnings per share).
Using to assess whether a stock is over-or under
valued based on the idea that the value of a stock
should be proportionnal to the level of earnings it
can generate for shareholders.
PER tend to be higher for industries with high
growth rates.
• Accounts receivable days = (13.2 / 176.1) × 365
= 27.35 days worth of sales
This company takes around 1 month to collect
payment from its customers on average. This
ratio has an impact on cash flow.

• Price earning ratio = (3.6 × $ 12) / 2 = 21.6

firms with low earnings can have a high PER (for
example for biotechnologie firms : 48)
 Income Statements – Summary

KEY indicators
2006   2007   2008  
in million of 2004   2005  
euros Restated(1) Restated(1)

Consolidated
6,601 7,136 7,607 8,121 7,739
revenue
EBITDAR  1,752 1,906 2,084 2,321 2,290
Operating
Profit Before
480 569 727 907 875
Tax and non-
recurring items
Net Income,
233 333 501 883 575
Group Share
Earnings per
1.17 1.55 2.23 3.92 2.60
share (in €)
Dividend per
1.30(2) 1.15 2.95(3) 3.15(4) 1.65(5)
Share (in €)
(1) In accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", in the consolidated income statements for the year ended December 31, 2004 and the year ended
December 31, 2005 the profits or losses of 2006 discontinued operations are reported on a separate line (mainly Carlson Wagonlit Travel).
(2) Including 0.25 EUR of special dividend.
(3) Including a special dividend of EUR 1.50.
(4) Including a special dividend of EUR 1.50.
(5) Subject to shareholder approval at the May 13, 2009 and payable in stock or in cash.