As corporations improve their working capital management, their free cash flow
also increases, potentially leading to higher valuations by investors and subsequent increases in shareholder value.
Management views Free Cash Flow
as an important financial measure of how well GWI is managing its assets.
This company, as a result, requires additional working capital investment and suffers a lower free cash flow
and, consequently, a reduced market capitalization.
Overall, Fitch's ratings for Level 3 continue to reflect the company's high leverage, negative free cash flow
and the execution risks surrounding the integration of the various acquisitions completed during 2006 and the first part of 2007.
Free Cash Flow
is defined as EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation).
Free cash flow
before acquisitions rose by 7% to DKK 1,058 million from DKK 991 million.
A key to Echostar's continued EBITDA growth and free cash flow
generation will be how the company balances subscriber growth, ARPU, subscriber churn and subscriber acquisition costs.
Fitch's LBO model projects free cash flow
and a solid internal rate of return (IRR) for potential equity sponsors that could support Motorola as an LBO candidate.
These high levels of free cash flow
allow us to build shareholder value in three ways: the advancement of our internal modem product development in support of product launch targeted for the fall of 2007, acquisitions of technology, and significant share repurchases.
Dividends reinvested in newly issued or treasury shares of common stock of the Company under a dividend reinvestment plan will not be treated as dividends for the purpose of the pre-dividend free cash flow
test and will not reduce excess cash for the purposes of the senior credit facility.
4x Madison River's LTM free cash flow
before and after anticipated synergies, respectively, and 8.
Although Norfolk Southern has been relatively aggressive in returning cash to shareholders through regular dividend increases and its share repurchase program, it has also used its substantial free cash flow
to reduce debt.