Compagnies des Alpes // 2019 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

These mainly include: l capital gains or losses from the disposal of shareholdings; l costs generated by the temporary closure of a site; l restructuring costs; l any other income or expense item that is easily identi fi able, unusual, signi fi cant and not directly related to current operations, except for speci fi c cases not resulting in cash out fl ows. An asset is classi fi ed 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 reasonable 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 classi fi ed as assets held for sale. In the case of discontinued operations, any net income and contribution to cash fl ow are presented separately from income and cash fl ow for continuing operations. CALCULATION OF EARNINGS PER SHARE The basic earnings per share fi gure 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 fi gure 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 The operating cash fl ow, net capital expenditure level, free cash fl ow, operating ROCE (return on capital employed) and net debt are the principal performance aggregates monitored by the Group. These are determined as follows: l operating cash fl ow: this measure corresponds to net income: l plus amortisation, depreciation and provisions, capital loss from disposals, dividends paid by the equity a ffi liates and other expenses without any impact on cash, l less provision reversals, capital gains from disposals, the share in the net income of equity a ffi liates 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 fl ow (1) : it corresponds to the di ff erence between the operating cash fl ow and the net capital expenditure; 1.9 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS 1.11 OTHER PERFORMANCE AGGREGATES USED

In the case of acquisitions of companies holding concession agreements, an analysis and fair value measurement of these agreements are performed on the basis of the expected pro fi t margin at the end of the concession agreement. Any variance between the pro fi tability of the concession agreement and the Group average is recognised under (intangible) assets or liabilities (provisions). It is amortised or recovered over the remaining term of the concession. Goodwill is the excess of the cost of an acquisition over the fair value of the Group’s share in the identi fi able net assets of the subsidiary or associate on the vesting date. Goodwill arising from the acquisition of a subsidiary is recognised under the item “goodwill”. Goodwill arising from the acquisition of an associate company is recognised under the item “investments in associate companies”. The Group is allowed 12 months from the vesting date to fi nalise accounting for the business combination in question. Any changes to the acquisition price made outside the allocation period are recognised in pro fi t or loss and no change is made to the acquisition cost or goodwill. REVENUE Sales of tickets (ski lift passes and admission fees to parks) are recognised in the reporting period in which visitors use the facilities of the Compagnie des Alpes Group. Prepaid tickets that will be used during the following period are only recognised in income when used for admission to a site. Unused prepaid tickets are recognised as deferred income. Services are recognised in income when the service is rendered. The sale of merchandise (shops and food services) is recognised when realised. In the consulting business, revenues relate to the invoicing of service and management consulting contracts. This happens when the services rendered are completed. In the tour-operator business, revenue depends on the distinction between agent and principal. When the Company acts as an agent, revenues relate to the commissions collected and when it acts as principal and bears the risks that come with owning inventory, it recognises revenue for the total amount of the price expected in exchange of goods or services provided and the amount paid to the third party is recognised as an expense. EBITDA 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 fi nancial income and income tax. 1.6 1.7

1.8

OTHER OPERATING INCOME AND EXPENSES

The items comprising operating income that are not directly related to current operations (because of their nature, frequency and/or relative signi fi cance) are recognised in “other operating income and expenses”.

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

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Compagnie des Alpes I 2019 Universal registration document