Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Anadarko Petroleum Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
A comprehensive analysis of the earnings data from 2012 to 2016 reveals a period of severe financial volatility and a sharp decline in profitability, followed by a partial operational recovery in the final year.
- EBITDA Performance
- Earnings before interest, tax, depreciation and amortization exhibited a consistent downward trajectory from 2012 to 2014, falling from 8,271 million US$ to 5,376 million US$. This trend culminated in a severe contraction in 2015, where EBITDA shifted to a negative value of 4,261 million US$. A recovery was observed in 2016, with the metric returning to a positive 1,362 million US$, although this figure remained significantly below the levels recorded prior to 2015.
- Net Income and EBT Trends
- Net income attributable to common stockholders and earnings before tax followed a similar pattern of decline, though they entered negative territory earlier than EBITDA. Net income turned negative in 2014 (-1,750 million US$) and reached its lowest point in 2015 (-6,692 million US$). By 2016, the net loss narrowed to 3,071 million US$, indicating a reduction in losses despite the absence of a return to net profitability.
- Operational Divergence and Non-Cash Impacts
- A notable divergence between operational cash proxies and bottom-line earnings is observed in 2014 and 2016. In 2014, EBITDA remained strongly positive at 5,376 million US$ while net income was negative, suggesting that interest, taxes, and non-cash charges exceeded operating gains. Similarly, in 2016, the return to a positive EBITDA of 1,362 million US$ contrasted with a negative EBIT of 2,939 million US$ and a net loss of 3,071 million US$. This indicates that while core operational cash generation stabilized, depreciation, amortization, and other non-operating expenses continued to result in accounting losses.
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Enterprise Value to EBITDA Ratio, Current
Anadarko Petroleum Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 42,437) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 1,362) |
| Valuation Ratio | |
| EV/EBITDA | 31.16 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Chevron Corp. | 10.84 |
| ConocoPhillips | 6.89 |
| Exxon Mobil Corp. | 10.53 |
Based on: 10-K (reporting date: 2016-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Anadarko Petroleum Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 52,747) | 38,042) | 53,609) | 54,057) | 54,164) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 1,362) | (4,261) | 5,376) | 6,719) | 8,271) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 38.73 | — | 9.97 | 8.05 | 6.55 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
3 2016 Calculation
EV/EBITDA = EV ÷ EBITDA
= 52,747 ÷ 1,362 = 38.73
4 Click competitor name to see calculations.
The financial metrics from 2012 to 2016 demonstrate a significant divergence between the enterprise value and operational earning capacity. While the enterprise value remained relatively stable for the majority of the period, EBITDA experienced a severe contraction, resulting in a period of negative earnings before a partial recovery.
- Enterprise Value Trends
- The enterprise value remained remarkably consistent between 2012 and 2014, maintaining a range between 53.6 billion and 54.2 billion US dollars. A sharp decline was observed in 2015, with the value dropping to 38.04 billion US dollars, followed by a substantial recovery to 52.75 billion US dollars by the end of 2016.
- EBITDA Performance
- A sustained downward trajectory in EBITDA is evident from 2012 through 2015. Operational earnings decreased from 8.27 billion US dollars in 2012 to 5.38 billion US dollars in 2014, eventually falling to a negative 4.26 billion US dollars in 2015. Although EBITDA returned to positive territory in 2016 at 1.36 billion US dollars, this figure represents a significant reduction in earning power compared to the 2012 baseline.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio rose steadily from 6.55 in 2012 to 9.97 in 2014, driven primarily by the decline in EBITDA while the enterprise value stayed flat. The ratio was not calculable for 2015 due to the negative EBITDA result. In 2016, the ratio spiked to 38.73, reflecting a disconnect where the enterprise value recovered toward previous levels while EBITDA remained depressed, leading to a disproportionately high valuation multiple.
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