Question

2016-12 2017-12 2018-12 3,845 7,932 11,270 2,228 4,160 5,623 1,617 3,772 5,647 Fiscal year ends in December. USD in millions except per share data. Revenue Cost of revenue Gross profit Operating expenses Research and development Sales, General and administrative Other operating expenses Total operating expenses Operating income Interest Expense Other income (expense) Income before taxes Provision for income taxes Other income Net income from continuing operations Net income from discontinuing ops Other Net income Preferred dividend Net income available to common shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted 864 2,575 1,201 4,640 -3,023 334 139 -3,218 28 1,201 4,787 1,864 7,852 -4,080 479 -16 -4,575 -542 1,505 5,233 1,942 8,680: -3,033 648 4,993 1,312 283 -42 987 -4,033 -3,246 2,876 10 -370 -4,033 997: -941! 1,938 -370 -4,033 0 o -3 -3 11 11 1,459 1,526 1,459 1,526 1,459) 1,526 Depreciation & amortization 347 510 426

a. What were operating cash flows for 2017, 2018, 2019?

b. Suppose that during those years the company also increased its net working capital and capital spending. Together with your answer to part (a), how would all that be possible? In other words, how did the company finance its investments and/or operating losses (if there were any)? Explain.

Answer 1

Particulars (USD in millions) 2016-12 2017-12 2018-12 Operating income -3023 -4080 -3033 Plus: Depreciation 347 510 426 Minus: provision for income taxe 28 -542 283 Plus: change in Working Capital 0 0 0 Operating Cash flow -2704 -3028 -2890

It may be noticed that for the Year 2018 the company has paid preference dividend of USD 941 million which was not paid for earlier years. This indicates that the company has raised money from the issue of Preference shares in the Year 2018. Also, there might be few other sources of financing its investment activities and operating losses from the mentioned below:
1. Cash flow from non-operating income from previous investments of the company.
2. Raising money from long term debt or borrowings or any other source of funding.