Adjusted debt obligations workout. Using the following selections from financial statements, please calculate the adjusted debt using the S&P methodology. Assume the tax benefits of the pensions have not been received. Marginal tax rate is 34.4%. So we have some selections here from a financial statement. And the first thing we need to do is go to the liabilities and equity section and identify what's on the balance sheet for debt obligations. So in the liability section, we have long-term borrowings of 5101. So I'm going to start by typing in 5101. And then I see they have non-current lease liabilities of 10373. So I'm going to add those. This is part of the new IFRS treatment of operating leases which is that they're going to be presented on the balance sheet as debt-like obligations. Now I'm gonna look to see if there are any other long-term borrowings or debt-like obligations, and I don't see any. So I'm going to go ahead and I'm going to add the short-term borrowings which are 7610. And then I have short-term or current lease liabilities of 2172.

I know that there's some other things hiding in here and where I'm going to look are in the notes. Typically, this non-current provisions and other liabilities is going to have some debt-like obligations in there related to pensions perhaps. So what I'm going to do is look in the note for pensions which is over to the right here. And that's this note, 30.2, and we're using the S&P methodology. So basically what we're gonna do is we're gonna take the defined benefit obligation and we're gonna net the market value of the plan assets and that gives us a recognized commitment of 777. As the problem informed us, the tax benefit of these pension payments have not yet been received. So we're going to adjust this commitment by the tax benefit. We'll take the 777 which is the unfunded pension-related benefit. We have a marginal tax rate of 34.4% from the top. And so the debt equivalent is going to be one minus the marginal tax rate times the unfunded pension amount. Now I need to look for guarantees which I would only have learned about if I had actually read through the financial statements. So this is an example of why it's very important to do that. The guarantees that have been given by LVMH in 2019 amount to 534. So we're going to go ahead and include these guarantees as obligations in our adjusted debt calculation. The adjusted debt will be the sum of the guarantees, the post-tax pension related benefit, and the debt as reported on the balance sheet.