2014 Registration Document and Annual Financial Report - page 178

Financial Statemements
Consolidated Financial Statements and Notes
5
2013 and 2014 Economic Value Added (EVA) have been calculated as follows:
Dec. 2013 Adjusted*
Dec. 2014*
WEIGHTED AVERAGE COST OF CAPITAL (WACC)
8.80% 8.57%
ROCE AFTER TAX
(1)
11.34% 11.82%
CAPITAL EMPLOYED
(inmillions of euros)
6,314
6,633
ECONOMIC VALUE ADDED
(2)
(inmillions of euros)
160
215
* Based on continuing operations: i.e. excluding the OnboardTrain Services business reclassified as a discontinued operation and restated to exclude the impact of the
January 1, 2014 adoption of IFRS 11 – Joint Arrangements, which has been applied retrospectively to all periods presented.
(1) ROCE after tax is determined as follows:
Adjusted EBITDA – [(Adjusted EBITDA – depreciation, amortization and provisions) x tax rate]
Capital employed
For example, at December 31, 2014 the data used in the formula were as follows:
Adjusted EBITDA
€969 million (see ROCE hereafter);
Depreciation, amortization and provisions (12 month) €321 million;
Effective current tax rate
28.5% (see Note 17.2);
Average capital employed
€6,633 million (see ROCE hereafter).
(2) EVA is determined as follows:
(ROCE after tax – WACC) x Capital employed
A 0.1 point increase or decrease in the Beta would have had a €41 million impact on December 2014 EVA, a €38 million impact on December 2013 EVA.
B. Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) is a key management indicator
used internally to measure the performance of the Group. It is
also an indicator of the profitability of assets that are either not
consolidated or accounted for by the equity method.
It is calculated on the basis of the following aggregates derived
from the consolidated financial statements:
ƒƒ
Adjusted EBITDA:
EBITDA plus revenue from financial assets and
investments in associates (dividends and interests);
ƒƒ
Capital Employed:
the average cost of 2013 and 2014 non-current
assets, before depreciation, amortization and provisions, plus
working capital.
ROCE corresponds to the ratio between adjusted EBITDA and
average capital employed for the period.
(inmillions of euros)
Dec. 2013 Adjusted*
Dec.2014*
Capital employed
6,511
6,911
Adjustments on capital employed
(1)
(198)
(283)
Effect of exchange rate on capital employed
(2)
1
5
AVERAGE CAPITAL EMPLOYED
6,314
6,633
EBITDA
846
923
Interest income on external loans and dividends
19
13
Share of profit of associates before tax (see Note 12)
18
33
PUBLISHED ADJUSTED EBITDA
883
969
ROCE (ADJUSTED EBITDA/CAPITAL EMPLOYED)
14.0% 14.6%
* Based on continuing operations: i.e. excluding the OnboardTrain Services business reclassified as a discontinued operation and restated to exclude the impact of the
January 1, 2014 adoption of IFRS 11 – Joint Arrangements, which has been applied retrospectively to all periods presented.
(1) For the purpose of ROCE calculation, capital employed is prorated over the period of EBITDA recognition in the income statement. For example, the capital employed of
a business acquired on December 31 that did not generate any EBITDA during the period would not be included in the calculation.
(2) Capital employed is translated at the average exchange rate for the year, corresponding to the rate used to translate EBITDA.
Registration Document 2014
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