FTE » Topics » 2.2 Presentation of the financial statements

This excerpt taken from the FTE 20-F filed Jun 25, 2007.

2.2    Presentation of the financial statements

 

 

Presentation of the income statement:

As allowed under IAS 1 “Presentation of Financial Statements”, expenses are presented by nature in the consolidated income statement.

Under IFRS, operating income corresponds to net profit before:

 

  -  

financial income;

 

  -  

finance costs;

 

F-14


Table of Contents
  -  

income taxes (current and deferred taxes);

 

  -  

net income of discontinued operations or operations held for sale.

In accordance with IFRS 5, the gain or loss of discontinued operations or non-current assets held for sale is reported on a separate line in the income statement. Assets and liabilities of controlled entities that are considered as being held for sale are reported on a separate line in the consolidated balance sheet. This does not affect the presentation of the cash flow statement.

 

 

Earnings per share

The Group discloses both basic earnings per share and diluted earnings per share for continuing operations and discontinued operations. Basic earnings per share are calculated by dividing net income for the year attributable to the equity holders of France Telecom S.A. by the average number of shares outstanding during the year. Diluted earnings per share are calculated based on earnings per share attributable to the equity holders of France Telecom S.A., adjusted for the finance cost of dilutive debt instruments and their impact on employee profit-sharing, net of the related tax effect. The number of shares used to calculate diluted earnings per share takes into account the conversion into ordinary shares of potentially dilutive instruments outstanding at year-end. When earnings per share are negative, diluted earnings per share are identical to basic earnings per share. In the event of an issuance of shares at a price lower than the market price, and in order to ensure comparability of earnings per share information, the weighted average numbers of shares outstanding from current and previous periods are adjusted. Treasury shares deducted from consolidated equity are not taken into account in the calculation of basic or diluted earnings per share.

This excerpt taken from the FTE 6-K filed Mar 7, 2007.

2.2 Presentation of the financial statements

 

 

Presentation of the income statement:

As allowed under IAS 1 “Presentation of Financial Statements”, expenses are presented by nature in the consolidated income statement.

Under IFRS, operating income corresponds to net profit before:

 

   

financial income;

 

   

finance costs;

 

   

income taxes (current and deferred taxes);

 

   

net income of discontinued operations or operations held for sale.

Gross operating margin, a sub-total calculated by France Telecom in accordance with paragraph 83 of IAS 1, corresponds to operating income before:

 

   

employee profit-sharing;

 

   

share-based compensation;

 

   

depreciation and amortization expense;

 

   

impairment of goodwill and other non-current assets;

 

   

gains and losses on disposal of assets;

 

   

restructuring costs;

 

   

share of profits (losses) of associates;

 

   

impairment of goodwill on associates.

Gross operating margin is one of the indicators used to track the operating performance of the Group and its divisions. It is also used as a basis for the appraisal of the Group’s Executive Directors and the divisional senior executive managers. It does not include employee profit-sharing because such costs are mainly generated by French legal requirements and are principally computed on the basis of the unconsolidated of each legal entity in the Group. Also, France Telecom has not included share-based compensation as such expenses mainly result from the sales of shares in the company by the French State (as further explained in Note 2.3.16), which are by nature unpredictable in their amount and in their frequency.

In accordance with IFRS 5, the gain or loss of discontinued operations or non-current assets held for sale is reported on a separate line in the income statement. Assets and liabilities of controlled entities that are considered as being held for sale are reported on a separate line in the consolidated balance sheet. This does not affect the presentation of the cash flow statement.

 

 

Earnings per share

The Group discloses both basic earnings per share and diluted earnings per share for continuing operations and discontinued operations. Basic earnings per share are calculated by dividing net income for the year attributable to the equity holders of France Telecom S.A. by the average number of shares outstanding during the year. Diluted earnings per share are calculated based on earnings per share attributable to the equity holders of France Telecom S.A., adjusted for the finance cost of dilutive debt instruments and their impact on employee profit-sharing, net of the related tax effect. The number of shares used to calculate diluted earnings per share takes into account the conversion into ordinary shares of

 

18


Table of Contents

potentially dilutive instruments outstanding at year-end. When earnings per share are negative, diluted earnings per share are identical to basic earnings per share. In the event of an issuance of shares at a price lower than the market price, and in order to ensure comparability of earnings per share information, the weighted average numbers of shares outstanding from current and previous periods are adjusted. Treasury shares deducted from consolidated equity are not taken into account in the calculation of basic or diluted earnings per share.

This excerpt taken from the FTE 6-K filed Feb 15, 2006.

2.1.4 Presentation of the financial statements

 

As allowed under IAS 1 – Presentation of Financial Statements, expenses are presented by nature in the consolidated income statement. The presentation of the income statement under IFRS is significantly different from that under French GAAP, with the inclusion in operating income of items presented as non-operating income and expense in the French GAAP income statement and of goodwill amortization and impairment losses.

 

Under IFRS, operating income corresponds to net profit before:

 

    financial income;

 

    finance costs;

 

    income taxes (current and deferred taxes);

 

    profits and losses of discontinued operations and operations held for sale.

 

Gross operating margin, a sub-total calculated by France Telecom in accordance with paragraph 83 of IAS 8, corresponds to operating income before:

 

    employee profit-sharing;

 

    share-based compensation;

 

    depreciation and amortization expense;

 

    impairment of goodwill and other non-current assets;

 

    gains and losses on disposal of assets;

 

    restructuring costs;

 

12


    share of profits (losses) of associates;

 

    impairment of goodwill on associates.

 

In accordance with IFRS 5, the assets and liabilities of controlled entities that are considered as being held for sale are reported on a separate line in the consolidated balance sheet. Profits or losses of discontinued operations are reported on a separate line of the income statement. IFRS 5 defines a discontinued operation as a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity, that either has been disposed of, or is classified as held for sale, and represents a separate major line of business or geographical area of operations.

 

This excerpt taken from the FTE 20-F filed May 17, 2005.

Presentation of financial statements

 

The application of IAS 1 (as revised December 2003) and, to a lesser extent, the application of IAS 14 – Segment Reporting and IFRS 5– Non-current Assets Held for Sale and Discontinued Operations will have significant consequences on the manner of the presentation and classification of items within France Telecom’s financial information.

 

The application of IAS 7 – Cash Flow Statements, will have limited impacts on cash flows from operating, investing and financing activities, when compared to French GAAP.

 

Under IFRS, the income statement will present expenses according to their nature.

 

Certain amounts presented as exceptional income and expense, and non-operating in the consolidated statement of income under French GAAP, will be treated as operating income and expenses under IFRS.

 

Reporting under IFRS will also result in different segment presentations and other disclosures in the financial statements.

 

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki