Many users unwittingly ignore what is packed into that line item when computing free cash flow
Growth must be profitable to be of value, profitable enough to generate healthy free cash flows
- that is, the money left over after subtracting expenses, taxes, and capital investment from revenues.
Net profit for the year is expected to increase by 5-7%, and free cash flow
before acquisitions is expected to be in the region of DKK 800-900 million.
30, 2006 level and free cash flow
as a percentage of total debt in excess of 8%.
Fitch estimates pro forma leverage and interest coverage metrics relative to EBITDA, cash flow from operations, and free cash flow
excluding any previously paid dividends.
This press release contains forward-looking statements regarding our current beliefs and expectations as to: levels of free cash flow
in 2007, payments related to current royalties and receipt of either scheduled license fee payments or new pre-payments, our ability to build shareholder value, a fall 2007 product launch, and our plans to reduce our average cost of capital.
CenturyTel estimates the transaction will be approximately 4% accretive to free cash flow
per share, before synergies.
Going forward, Fitch expects the company to continue using a portion of its free cash flow
to repurchase shares, although at a lower rate than seen in 2006.
Industry financial flexibility remains strong as cash balances are close to $200 billion, flat since year-end 2003, and annual free cash flow
remains at approximately $60 billion.
Free cash flow
could grow somewhat, however, as reduced business levels result in lower capital spending needs.
Operating profit margin expansion and increasing free cash flow
primarily due to improving execution of previously underperforming mega-deal contracts, principally Navy Marines Corps Intranet (NMCI) and Ministry of Defense (MoD), despite significant ongoing expenses for tools and workforce realignment (Investments).
In addition, Fitch believes that the electronics manufacturing services (EMS) industry in general continues to suffer from excess capacity which will likely continue to negatively impact pricing for all competitors and represents further risk to Flextronics' margins and free cash flow