Compute free cash flow. Using the reorganized financial statements, calculate free cash flow for the most recent year. Free cash flow is defined as NOPLAT plus depreciation, less investment in working capital; plant, property, and equipment (PP&E); intangible assets; and other noncurrent assets (net of noncurrent liabilities). Each investment should match a corresponding account in invested capital. To determine net capital expenditures (net of PP&E sales), compute the increase in PP&E plus depreciation. To determine investment in intangibles, compute the increase in acquired intangibles plus amortization.

Henkel AG Income statement EUR million Net revenues Cost of sales Gross profit 2005 2006 2008 2009 2007 11,97412,740 13,07414,131 13,573 7,013 6,061 -6,533 5,441 -6,963 5,777 -8,190 5,941 7,411 6,152 3,650 -340 697 266 -58 1,298 3,748 350 664 109 -3,993 429 -825 160 75 779 3,409 324 627 Marketing, selling, and distribution Research and development General and administrative Other operating income Other operating charges Operating profit (EBIT -3,926 396 735 140 165 1,080 64 1,081 1,344 Investment result Interest (expense) income Earnings before income taxes 210 1,042 176 1.176 1,123 -275 1,627 -4 191 885 -178 1.250 Income tax benefit (provision) Net income 272 770 -305 871 -309 941 394 1,233 257 628 Attribution Attributable to shareholders of Henkel AG Attributable to minority shareholders Net income 833 877 122 658 26 684 612 625 849 897 134 Source: Henkel 2009 Annual Report, page 80