Compagnie des Alpes // 2020 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

1.7 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION EBITDA is the key line item used by the Group to represent the operating performance of its various activities. It includes the income and expense items that are directly related to current operations, and is calculated before the cost of holding assets (amortisation, depreciation and impairment), other operating income and expenses, net financial income and income tax. The items comprising operating income that are not directly related to current operations (because of their nature, frequency and/or relative significance) are recognised in “other operating income and expenses”. These mainly include: l capital gains or losses from the disposal of shareholdings; l costs generated by the closure of a site; l restructuring costs; l any other income and expense that is easily identifiable, unusual and significant, and the nature of which is not directly related to current operations. 1.8 OTHER OPERATING INCOME AND EXPENSES An asset is classified as “available for sale” only if a plan has been put in place by management to sell the asset, if the asset is available for immediate sale in its present condition and if the sale is highly probable within a 12-month time-frame. At the time of initial recognition as “held for sale”: l non-current assets and groups of assets that are intended to be sold are recognised at the lower of their book value and fair value less costs to sell; l amortisable assets are no longer amortised from the date on which they are classified as assets held for sale. In the case of discontinued operations, any net income and contribution to cash flow are presented separately from income and cash flow for continuing operations. CALCULATION OF EARNINGS PER SHARE The basic earnings per share figure is obtained by dividing the net income available for shareholders of the parent company by the weighted average number of shares outstanding during the period. The diluted earnings per share figure is obtained by dividing the net income available for shareholders of the parent company by the weighted average number of outstanding shares during the period, adjusted for the impact of all dilutive instruments. 1.10 1.9 NON-CURRENT ASSETS AVAILABLE FOR SALE AND DISCONTINUED OPERATIONS

These are determined as follows: l operating cash flow: this measure corresponds to net income l plus amortisation, depreciation and provisions, capital loss from disposals, dividends paid by the equity affiliates and other expenses without any impact on cash, l less provision reversals, capital gains from disposals, the share in the net income of equity affiliates and other income without any impact on cash; l net capital expenditure: this measure corresponds to the acquisition of property, plant and equipment and intangible assets net of the changes in trade payables on non-current assets and income from their disposal; l free cash flow (1) : it corresponds to the difference between the operating cash flow and the net capital expenditure; l ROCE (return on capital employed) and operating ROCE on sites: this measure allows measuring of the profitability of the Group’s invested capital and the Group’s principal business lines, namely, Ski areas and Leisure parks. It corresponds to the percentage, for each business line and the total for both business segments, of the after-tax net operating income on the consolidated net asset amount determined as follows: l after tax net operating income: it is determined after deducting a theoretical tax expense by applying a standard tax rate, l net assets used excluding goodwill include: l non-current assets in net amount after exclusion of goodwill, l the right of use relating to the application of IFRS 16, l working capital requirement, l deferred tax assets net of deferred tax liabilities, l current provisions. The operating ROCE on sites is determined on the basis of the aggregates indicated above for each of the business lines, after the exclusion of goodwill; l net debt: corresponds to gross borrowings net of cash and cash equivalents. INTANGIBLE ASSETS The intangible assets acquired appear on the balance sheet at their amortised cost. When the Group measures brands and trademarks, following analysis, these are considered as having indefinite useful lives. They are thus not amortised and are instead tested for impairment annually (see Note 6.1). Intangible assets and other use rights to assets, the duration of which is directly linked to a concession agreement or lease, are l usage rights: the intangible rights to operate the ski lifts of ADS (Les Arcs/Peisey), Sevabel (Les Ménuires), SCV Domaines Skiables (Serre Chevalier), GMDS (Flaine) and STVI (Val-d’Isère); l the concession to use the motorway interchange opening access to Parc Astérix expiring in 2086; and l the right to use the “Futuroscope” brand expiring in 2050 under the new 30-year lease granted on 12 October 2020. 1.12 amortised up to the date of expiry of such contracts. This in particular applies to (see Notes 1.14 and 6.2):

1.11

OTHER PERFORMANCE AGGREGATES USED

The operating cash flow, net capital expenditure level, free cash flow, operating ROCE (return on capital employed) and net debt are the principal performance aggregates monitored by the Group.

(1) The changes in the operating working capital requirement are not taken into account.

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Compagnie des Alpes I 2020 Universal registration document