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Charter Communications Inc. (CHTR)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Charter Communications Inc., FCFF calculation

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net income (loss) attributable to Charter shareholders
	Net income attributable to noncontrolling interests
	Net noncash charges
	Changes in operating assets and liabilities, net of effects from acquisitions and dispositions
	Net cash flows from operating activities
	Cash paid for interest, net of tax¹
	Purchases of property, plant and equipment
	Free cash flow to the firm (FCFF)

Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Charter Communications Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Charter Communications Inc.’s FCFF increased from 2015 to 2016 and from 2016 to 2017.

Charter Communications Inc., interest paid, net of tax calculation

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Effective Income Tax Rate (EITR)

	EITR¹
	Interest Paid, Net of Tax
	Cash paid for interest, before tax
	Less: Cash paid for interest, tax²
	Cash paid for interest, net of tax

2017 Calculations

² Cash paid for interest, tax = Cash paid for interest × EITR
= hidden × hidden = hidden

Charter Communications Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (USD $ in millions)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors
Comcast Corp.
Twenty-First Century Fox Inc.
Walt Disney Co.
EV/FCFF, Sector
Media
EV/FCFF, Industry
Consumer Services

If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.

Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Charter Communications Inc., historical EV/FCFF calculation, comparison to benchmarks

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Selected Financial Data (USD $ in millions)
	Enterprise value (EV)¹
	Free cash flow to the firm (FCFF)²
	Ratio
	EV/FCFF³
	Benchmarks
	EV/FCFF, Competitors
	Comcast Corp.
	Twenty-First Century Fox Inc.
	Walt Disney Co.
	EV/FCFF, Sector
	Media
	EV/FCFF, Industry
	Consumer Services

2017 Calculations

³ EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

Ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Charter Communications Inc.’s EV/FCFF ratio declined from 2015 to 2016 and from 2016 to 2017.

	Charter Communications Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality