Other assumptions for 30% revenue decline scenario
Dividends capped at lower of: (i) FCFO-CapEx (if positive), (ii) 2019 dividend amount. Dividends eliminated if FCFO-CapEx is negativeShare repurchases stoppedNo additional financingsAll variable operating expenses change proportionally with revenueNon-operating expenses (not shown in chart) remain flat with 2019 (including any interest expenses if present)2019 tax rate for M applied to scenario EBTPro rata cash balance does not reflect drawdowns on existing revolvers that may have already happened or other financing events
Trefis has estimated variable operating expenses for M by categorizing operating expense items as variable vs. fixed. These are separate from non-operating income and expenses, and separate from tax expenses.
For M variable operating expenses include: Cost of Revenue; Selling, General And Administrative Expenses;
We use FCFO-CapEx as a proxy for the core cash generated or consumed by the business. It ignores cash raised from financings (issuing debt or equity) or cash returned via dividends or share repurchases.
Returns to Shareholders
Dividends + share repurchases represent the returns distributed to shareholders.