Return on Equity (ROE)
since 2006
Calculation
Time Warner Cable Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss) attributable to TWC shareholders1 | ÷ | Total TWC shareholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2015 | 20.50% | = | 100 | × | 1,844) | ÷ | 8,995) |
| Dec 31, 2014 | 25.35% | = | 100 | × | 2,031) | ÷ | 8,013) |
| Dec 31, 2013 | 28.14% | = | 100 | × | 1,954) | ÷ | 6,943) |
| Dec 31, 2012 | 29.61% | = | 100 | × | 2,155) | ÷ | 7,279) |
| Dec 31, 2011 | 22.11% | = | 100 | × | 1,665) | ÷ | 7,530) |
| Dec 31, 2010 | 14.20% | = | 100 | × | 1,308) | ÷ | 9,210) |
| Dec 31, 2009 | 12.32% | = | 100 | × | 1,070) | ÷ | 8,685) |
| Dec 31, 2008 | -42.79% | = | 100 | × | (7,344) | ÷ | 17,164) |
| Dec 31, 2007 | 4.55% | = | 100 | × | 1,123) | ÷ | 24,706) |
| Dec 31, 2006 | 8.39% | = | 100 | × | 1,976) | ÷ | 23,564) |
Based on: 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), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31).
1 US$ in millions
The financial performance from 2006 to 2015 is characterized by significant volatility in the early period followed by a structural shift in the relationship between net income and shareholders' equity. A critical inflection point occurred in 2008, which fundamentally altered the return on equity (ROE) trajectory for the remainder of the decade.
- Net Income Volatility
- A substantial net loss of US$ 7,344 million was recorded in 2008, representing a sharp deviation from the profitability observed in 2006 and 2007. A recovery phase followed from 2009 through 2012, with net income reaching a peak of US$ 2,155 million. Between 2013 and 2015, earnings stabilized, fluctuating within a narrow range between US$ 1,844 million and US$ 2,031 million.
- Equity Base Erosion
- A pronounced downward trend in total shareholders' equity is observed between 2007 and 2013. Equity decreased from a peak of US$ 24,706 million in 2007 to a low of US$ 6,943 million in 2013. This reduction of over 70% in the equity base indicates a significant shift in the capital structure during this period. A modest recovery in equity began in 2014, rising to US$ 8,995 million by 2015.
- Return on Equity (ROE) Analysis
- ROE exhibited extreme fluctuations, crashing to -42.79% in 2008 in direct correlation with the net loss. From 2009 to 2012, ROE experienced a rapid ascent, peaking at 29.61%. This surge was the result of the dual impact of recovering net income and a concurrently shrinking equity denominator. In the final period from 2013 to 2015, ROE entered a gradual decline, ending at 20.50% as the equity base began to increase while net income remained relatively flat.
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Comparison to Competitors
Time Warner Cable Inc., ROE, long-term trends, comparison to competitors
| Time Warner Cable Inc. | Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Netflix Inc. | Walt Disney Co. | |
|---|---|---|---|---|---|---|
| Dec 31, 2015 | 20.50% | 13.59% | 15.62% | 8.34% | 5.52% | 18.83% |
| Dec 31, 2014 | 25.35% | 13.82% | 15.90% | 8.14% | 14.36% | 16.68% |
| Dec 31, 2013 | 28.14% | 14.80% | 13.45% | 9.70% | 8.43% | 13.51% |
| Dec 31, 2012 | 29.61% | 14.97% | 12.57% | 0.45% | 2.30% | 14.29% |
| Dec 31, 2011 | 22.11% | 16.75% | 8.80% | — | 35.18% | 12.86% |
| Dec 31, 2010 | 14.20% | 18.39% | 8.20% | — | 55.44% | 10.56% |
| Dec 31, 2009 | 12.32% | 18.11% | 8.52% | — | 58.18% | 9.80% |
| Dec 31, 2008 | -42.79% | 14.97% | 6.30% | — | 23.92% | 13.70% |
| Dec 31, 2007 | 4.55% | 18.53% | 6.26% | — | 15.54% | 15.24% |
| Dec 31, 2006 | 8.39% | 18.06% | 6.15% | — | 11.85% | 10.60% |
Based on: 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), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31).
Comparison to Sector (Media & Entertainment)
Time Warner Cable Inc., ROE, long-term trends, comparison to sector (media & entertainment)
| Time Warner Cable Inc. | Media & Entertainment | |
|---|---|---|
| Dec 31, 2015 | 20.50% | 13.93% |
| Dec 31, 2014 | 25.35% | 13.96% |
| Dec 31, 2013 | 28.14% | 13.73% |
| Dec 31, 2012 | 29.61% | 13.09% |
| Dec 31, 2011 | 22.11% | 13.20% |
| Dec 31, 2010 | 14.20% | 12.67% |
| Dec 31, 2009 | 12.32% | 12.06% |
| Dec 31, 2008 | -42.79% | 11.13% |
| Dec 31, 2007 | 4.55% | 12.13% |
| Dec 31, 2006 | 8.39% | 9.99% |
Based on: 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), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31).
Comparison to Industry (Communication Services)
Time Warner Cable Inc., ROE, long-term trends, comparison to industry (communication services)
| Time Warner Cable Inc. | Communication Services | |
|---|---|---|
| Dec 31, 2015 | 20.50% | 16.38% |
| Dec 31, 2014 | 25.35% | 14.00% |
| Dec 31, 2013 | 28.14% | 16.63% |
| Dec 31, 2012 | 29.61% | 10.32% |
| Dec 31, 2011 | 22.11% | 8.87% |
| Dec 31, 2010 | 14.20% | 13.88% |
| Dec 31, 2009 | 12.32% | 11.62% |
| Dec 31, 2008 | -42.79% | 12.77% |
| Dec 31, 2007 | 4.55% | 11.11% |
| Dec 31, 2006 | 8.39% | 8.87% |
Based on: 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), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31).