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As background, I understand the definition of Minority Interest and how it is reported depending on the company's ownership in the subsidiary (0%-20%, 21%-49%, 50%-99%). My question stems from a valuation perspective. Assuming a company owns more than 50% of its subsidiary, are the revenues and expenses recorded as operating or investing activities? I like to use NOPAT - CapEx + Dep - delta WC as a definition of free cash flow. If 100% of the revenue and cost from Minority Interests are recorded as operating profits, than I am overstating the NOPAT. Any rules of thumb on is this question or is it entirely company specific? Thanks for the help.

Elliott

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