Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Time Warner Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2017-12-31), 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).
Financial performance between 2013 and 2017 is characterized by a general upward trajectory across all primary earnings metrics, with a notable acceleration in profitability during the final year of the period.
- EBITDA Trends
- Earnings before interest, tax, depreciation and amortization exhibited consistent growth, rising from US$ 14,734 million in 2013 to US$ 17,015 million in 2017. While growth remained moderate between 2013 and 2016, a significant increase occurred in 2017, representing the highest value in the observed period.
- Operating and Pre-Tax Earnings
- Earnings before interest and tax (EBIT) and earnings before tax (EBT) displayed higher volatility than EBITDA. Both metrics experienced contractions in 2014 and 2016 before reaching peak values in 2017 at US$ 7,159 million and US$ 5,945 million, respectively.
- Net Income Performance
- Net income attributable to shareholders maintained a steady year-over-year increase from 2013 through 2016. A substantial surge is observed in 2017, where net income rose to US$ 5,247 million, marking a significant deviation from the gradual growth observed in previous years.
- Non-Cash Charge Analysis
- A substantial and widening gap is observed between EBITDA and EBIT, indicating significant annual depreciation and amortization expenses. These non-cash charges rose from US$ 8,148 million in 2013 to US$ 9,856 million in 2017, reflecting a high level of capital intensity or significant amortization of intangible assets.
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Enterprise Value to EBITDA Ratio, Current
Time Warner Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 94,404) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 17,015) |
| Valuation Ratio | |
| EV/EBITDA | 5.55 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Alphabet Inc. | 22.67 |
| Comcast Corp. | 3.61 |
| Meta Platforms Inc. | 17.91 |
| Netflix Inc. | 9.97 |
| Walt Disney Co. | 11.73 |
Based on: 10-K (reporting date: 2017-12-31).
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
Time Warner Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 94,719) | 97,959) | 74,309) | 88,328) | 76,049) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 17,015) | 15,576) | 15,539) | 14,805) | 14,734) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 5.57 | 6.29 | 4.78 | 5.97 | 5.16 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 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).
3 2017 Calculation
EV/EBITDA = EV ÷ EBITDA
= 94,719 ÷ 17,015 = 5.57
4 Click competitor name to see calculations.
The financial period between 2013 and 2017 is characterized by a steady increase in operational earnings contrasted with significant volatility in total enterprise valuation. While EBITDA exhibited a consistent upward trajectory, the Enterprise Value fluctuated, resulting in an EV/EBITDA ratio that shifted throughout the five-year duration.
- Enterprise Value (EV) Trends
- The enterprise value experienced notable instability, starting at 76,049 million US$ in 2013 and peaking at 97,959 million US$ in 2016. A significant contraction occurred in 2015, where the value dropped to 74,309 million US$, before rebounding sharply in the following year and ending 2017 at 94,719 million US$.
- EBITDA Growth Analysis
- Operational performance demonstrated consistent growth, with EBITDA rising from 14,734 million US$ in 2013 to 17,015 million US$ by 2017. This steady climb indicates a stable expansion of core earnings capacity over the analyzed period.
- EV/EBITDA Ratio Interpretation
- The valuation multiple fluctuated between a low of 4.78 in 2015 and a high of 6.29 in 2016. Because EBITDA grew consistently, the variations in the ratio are primarily attributable to the volatility of the Enterprise Value. The decline in the ratio during 2015 reflects a period where the market valuation decreased despite an increase in earnings, whereas the peak in 2016 suggests a significant premium placed on the enterprise relative to its operational cash flow.
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